If you want to invest your money in an investment fund as a saver, you will not think much about whether it is a mutual fund or a special fund. The funds that are issued by the banks to private investors in this country are all public funds. This applies to all investment segments, be it equity funds, pension funds or specialized industry and theme funds. The fund companies also offer another type of fund: so-called special funds. These are only issued for institutional investors and may not be acquired by private individuals.
- Funds that are issued by banks to private investors in this country are all retail funds.
- Every investor can purchase shares in a mutual fund. However, this does not give him any say in the selection of the values in the fund.
- Mutual funds enable every saver, regardless of whether they are experienced in securities investments or not, to place their credit in securities without having to worry about the selection of the individual securities.
Legal basis of the mutual funds
Every investor can purchase shares in a mutual fund. However, this does not give him any say in the selection of the values in the fund. The primary regulation of a mutual fund results from the capital investment code, the secondary from the investment guidelines for fund management, for example with regard to the level of the equity quota in a mixed fund.
Special funds – the counterpart
Special funds are not open to every investor, but are sometimes specially designed for the respective client, for example pension funds. Often they only have a single institutional investor. This means that they can be individually adapted to his needs. Depending on the structure, the investors in a special fund have a say in the composition of the portfolio. The fund units are not traded on the stock exchange as is the case with a public fund. The entry-level sizes for a special fund can amount to a million euros and more.
Open and closed investment funds
In some cases, special funds are also closed-end funds whose capital inflow is limited. However, closed mutual funds also exist. Open funds accept new investments all the time and are not limited in the number of units to be issued. If there is high demand, the fund company can issue new shares at any time. The term of a closed fund, on the other hand, is divided into several phases. First investors are sought. If enough capital is available for the planned investment, the fund will be closed. This means that new investors can no longer get in and existing ones can neither change nor withdraw their investment amount. When the planned term has expired, the fund will be dissolved and the proceeds distributed to those involved.
Mutual funds – securities investment for everyone
Short for MF by abbreviationfinder, mutual funds enable every saver, regardless of whether they are experienced in securities investments or not, to place their credit in securities without having to worry about the selection of the individual securities. The categorization according to investment focus makes it easier to make a decision in advance. Conservative savers will find an option with a bond fund or a mixed fund, as will investors who want to build up their assets over the long term with stocks.
The advantage of mutual funds over investing in a single title is clearly that they are risk diversified. Due to the broad diversification of the investment objectives, there is no longer a segment in the capital market that is not covered by a retail fund. Regardless of whether an investor wants to invest in German stocks, bonds from emerging countries or warrants – the mutual funds approved for trading in Germany cover every need.