This Must Be Considered Before Investing in Mutual Funds
From year to year the value of managed funds in Indonesia continues to increase. Data from the Financial Services Authority (OJK) recorded that the value of assets under management (AUM) for industry mutual funds reached Rp540.91 trillion as of September 2019. Compared to 2015, the AUM value of mutual funds was Rp272 trillion. The surge shows a large public interest in mutual funds.
Investment options in the country are as varied as savings and deposits. Both of these bank investment products are still considered to be the people’s favorite investment choices because they are safe and the risk of investment is very low and the money saved in banks is guaranteed by the Deposit Insurance Corporation (LPS).
However, if the two investments are compared to mutual funds, it is clear that mutual funds are more promising in providing returns, with lower risks compared to stock investments, but mutual funds are not guaranteed by LPS.
As a potential investor, for those of you who are now interested in investing in mutual funds, you should first understand the 20 things below so that your mutual fund investment can be maximized in growth.
1. Investment Managed Investment Funds
Mutual funds are investment products managed by investment managers (MI) who together with custodian banks act as investment managers themselves. In managing funds originating from customers, investment managers will place funds collected from customers into securities portfolios, such as Bank Indonesia Certificates (SBI), bonds, and shares. While the custodian bank will be tasked with saving and completing the mutual fund administration transaction.
In carrying out its business activities, investment manager companies must have a business license from the Financial Services Authority (OJK).
Based on OJK data as of December 2019, there were 98 registered and licensed investment managers. You can check the list of names of investment managers here.
2. Mutual Funds Are Practical and Easy
Mutual funds are an investment product that is practical and easy to have. All management activities will be handled by investment managers who of course have been equipped with expertise. This is the reason why mutual funds are very suitable for investors who are very busy and do not have time to pick and choose where the funds are placed. Or even for those who do not have good knowledge related to investment activities.
3. Law No. 8 of 1995 as the Legal Basis for Mutual Funds
Mutual funds are regulated in the Capital Market Law Number 8 of 1995 Article 1 paragraph 27 which states that “Mutual funds are a container used to collect funds from the investor community for further investment in securities portfolios by investment managers.”
4. Latest Developments in Mutual Funds in Indonesia
The Financial Services Authority (OJK) recorded significant growth in mutual fund investments in Indonesia. This is reflected in an increase in the total managed funds of mutual funds.
Reporting from Liputan6.com, OJK Investment Management Director, Sujanto said that in the last 3 years, the total managed funds of mutual funds have doubled, namely Rp 272 trillion in 2016, to Rp 507 trillion as of 9 May 2019. In addition, the amount Mutual fund products also increased significantly. Since 2016, the number of mutual fund products has tripled, from 1,091 products in 2016 to 2,082 products as of May 9, 2019.
Of course, next year as the Indonesian economy is projected to grow positively, mutual fund investment can be a good choice. However, you still have to understand, even though it is predicted to experience positive growth, mutual fund investment is still at risk. So you still need to be aware of fluctuating market developments.
5. Can Start Investment in Mutual Funds with a Capital of IDR 10,000
Mutual funds are different from other investments, such as deposits or bonds, which in general will require a sizable amount of funds. To start this investment, investors can do it with funds of only IDR 10,000.