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Illustrations taken from the OJK Mutual Fund website:

http://reksadana.ojk.go.id

The definition of Mutual Fund according to Chapter I Law Number: 8 of 1995 on Capital Market, Mutual Fund is a form of investment used to collect funds from the investors to be reinvested in securities portfolio by the Investment Manager.

Collective Investment Contract is a contract between Investment Manager and Custodian Bank that binds Participation Unit holders in which Investment Manager is authorized to manage Collective Investment portfolio and Custodian Bank is authorized to conduct Collective Custody (POJK No: 23 / POJK.04 / 2016).

Based on the Regulation of the Financial Services Authority No. 23 /POJK.04/2016 About Mutual Funds In the form of Collective Investment Contracts, Mutual Funds in the form of Collective Investment Contract can only make purchases and sales of:

1. Securities that have been sold in a Public Offering and / or traded on both Domestic and foreign Stock Exchange.

2. Debt securities such as commercial paper which have been rated by Securities rating agency, Sovereign Debt Instruments, and / or Debt Securities issued by an international institution in which the Government of Indonesia becomes one of its members.

3. Asset Backed Securities offered through a Public Offering and already rated by Securities rating agency.

4. Domestic Money market instruments with a maturity of less than 1 (one) year, including Certificates of Bank Indonesia, Money Market Securities, Debt Recognition Letter , and Certificates of Deposits, whether in rupiah or in foreign currency; and / or

5. Domestic commercial securities with maturity of less than 3 (three) years and rated by the Securities rating agency.

1. Diversification of investments

With an investment of Rp 100,000 (one hundred thousand Rupiah), customers have a mutual fund investment unit whose investments have diversified into various securities, reducing the risk of investing in one share, bond or bank deposit. Customers with limited funds can benefit from investment diversification as well as large investors.

 

2. Managed by a professional Investment Team

The management of the mutual fund portfolio is carried out by an investment team who are experts in the field and has obtained the Wakil Manajer Investasi ("WMI") license from OJK. Individual investors generally have limited time and access to information, then the role of Investment Manager becomes very important in making investments in the market Capital and money market.

 

3. Ease of transaction.

Investors can indirectly invest in capital markets / money, without going through complicated procedures and requirements.

 

4. Transparency of information.

Holders of Participation Units may obtain information on Mutual Funds in a transparent manner through Prospectus, Net Asset Value (NAV) calculated by Custodian Bank, independent third party, to be announced daily in business newspapers such as Bisnis Indonesia, Kontan, Investor Daily, etc. as well as the company's website and annual financial statements through the Prospectus updates every 1 (one) year. This will make it easier for customers to know their investment value at any time.

 

5. High Liquidity

Mutual funds are required to buy back their investment units. The proceeds from the investment units sale shall be transferred to the investor's account within 2 or 3 Exchange days (depending on the type of mutual fund) or at the latest before 7 Exchange days, except in the majeure state.

 

6. Investment costs are relatively low

Mutual Fund is a collection of funds from investors which are managed purposefully and accountable. So with these capabilities, Mutual Fund will generate transaction cost efficiency. In other words, the transaction cost will be lower than if the individual investor engages in his own transactions in the capital / money market.

 

7. Investment growth potential

Mutual Fund is a collection of funds from investors which are managed purposefully and accountable. Therefore, with the accumulation of these funds, Mutual Funds have better bargaining power in obtaining higher returns and access to investment instruments that are difficult if done individually. This provides equal opportunity to all Holders of Participation Units to obtain a relatively good return on investment according to the level of its risk.


1. Risk reduction in the Net Asset Value

Investments held by the Fund may experience fluctuations and risks prevalent in securities and there is no guarantee that it will increase in value.

2. Risk of Liquidity

Investment Manager to provide cash sufficient to pay the redemption Units conducted by the Holder of Participation Unit. If together in a short time the Holder of Participation Unit selling Participation Unit to the Investment Manager, the Investment Manager may experience liquidity difficulties providing cash immediately. In the event of circumstances beyond the control of the Investment Manager (force majeure), Redemption may be suspended in accordance with the provisions of the Collective Investment Contract and Financial Services Authority (OJK) Regulations.

3. Risk of Mutual Fund Coverage

Custodian Bank insures all assets / wealth of Mutual Funds at a reputable insurance company in a manner that are considered good and proper by the Custodian Bank. In regard to this matter, the insurance carried out by the Custodian Bank will only cover the part of which is the responsibility of the Custodian Bank in accordance with its function under applicable laws and regulations.

1. Money Market Fund

The types of mutual funds that invest in the money market including time deposits, Certificates of Bank Indonesia (SBI) and short-term debt (less than one year). This Mutual Fund has the lowest risk compared to other mutual funds and could be a complementary for the purpose of short-term investment objectives (less than 1 year or up to 1 year) for investors other than deposits.

 

2. Fixed Income Fund

This mutual fund has an intermediate risk where its growth is relatively stable and not fluctuating, because its focus portfolio consists of bonds debt securities (issued by the government and / or companies) and money market instruments. These mutual funds are generally used for medium-term investment purposes (over 1 year up to 3 or 5 years).

 

3. Balanced Mutual Funds

This mutual fund invests in stocks and bonds with a certain composition, where the rate of return (return) are slightly fluctuated but relatively stable at growth compared to equity funds. Balanced funds are commonly used for medium up to long term investment purposes (3 years or more).

 

4. Equity Funds

Types of Mutual Funds that invest in stocks with varying returns and tend to fluctuate as market and economic conditions develop. This Mutual Fund is suitable for investors who pursue the growth of investment value optimally in the long-term period.

 

5. Protected Fund

Protected Funds, has a special protection feature (but not a guarantee) of the principal amount of the initial investment, in the absence of default of the instruments or issuers of debt securities used or counterparty involved in the investment portfolio of this product.

Protected mutual funds are generally categorized as low to medium term risk investments and are generally used for medium term investment purposes. In Protected mutual funds investment, investors generally have to commit to a certain investment period to get protection benefits for example 2 or 3 years depending on the product features concerned.

Fees borned by Mutual Funds:

The fees borned by mutual funds and reflected in the unit price of the participation (NAV).

  • Cost of Investment Manager (management fee)
  • Cost of Custodian Bank (custodian fee)
  • The costs of public accountants, legal consultants and notaries after mutual funds are declared effective by OJK
  • The cost of printing and delivery of prospectus renewals, financial statements, and participation unit confirmation to customers after mutual funds is declared effective by OJK
  • Expenses for emergency purposes for the benefit of mutual funds, and
  • Tax payments relating to these costs

Fees borned by Customer:

  • Participation Unit purchase fee, if any
  • Participation Unit redemption fee, if any
  • Participation Unit transfer fee, if any
  • Bank transfer fee related to the purchase and redemption of mutual fund participation unit
  • Fee of Integrated Investment Management System (S-Invest)  by Indonesia Central Securities Depository (KSEI)

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