Mutual Funds

A mutual funds, FCI (Acronym) or mutual fund is an investment alternative which is to raise funds from various investors, natural or juridical, to invest in different financial instruments; responsibility is delegated to a Management Company which may be a bank or financial institution.

The FCI or mutual funds are diversified investment alternatives, and investing in many instruments, reducing the risk.

A mutual fund is a capital represented by the contributions of various people, called participants in the fund, managed by a management company responsible for its management and administration, and by a depository institution that guards the securities and cash and acts as security and surveillance before investment.

By investing in a fund gets a number of shares, which daily have a price or net asset value, obtained by the division between the heritage value and number of shares outstanding.

The fund’s performance becomes effective at the time of sale of the shares, which may take place at the time desired.
The savings through banks, credit unions, or checkbooks teachers but help maintain the real value of your money offer relatively low interest rates. In the search for higher yields, you can choose to invest in directly in stock exchange, debt, etc.

For those; who find it difficult to invest directly in shares of publicly traded companies or to diversify the investment in debt or foreign currency, there are alternative mutual funds like index funds. Also always worth starting with the most elemental, with the basics, and speculation that can make a lot, but you can also lose a lot.

Mutual funds are a mechanism for savings. It is a society organized by a group of investors who seek an end common investment companies there are many types: those who invest in debt or fixed income or investing in company stock is equity. There are plenty of funds to suit the needs of each investor, and banks now offer great facilities for investment in these mechanisms.

The fact that investment companies are “group of people,” helps reduce the amount of money necessary to invest. Normally you can go from $ 10,000 pesos, and some banks from $ 1,000.00. Mutual funds are an alternative for everyone.

Mutual funds assessed from the perspective and criteria of selection method Julie Stav, eliminating all funds less competitive, volatile and expense that affect the small investor, are what is called “no-load funds”. In this there are no commissions or fees Or intermediaries or agents, and have a strategy and a team based on the best interests of the small investor.

The list given in this article reflects the best mutual funds diversified over the past 10 years, focusing primarily on the average returns per year long term (10 and 5 years respectively) and on top of its category in the different periods of time analyzed. It has also paid attention to are funds that have performed well especially in periods of crisis, as in the years after the fall of technology stocks in 2000-2002 or during financial crisis last year 2009.

As taught in her book Julie Stav Invest in your future, We observe very closely the expenditure (expense ratio) Of mutual funds and compared with average costs in its class. Funds with high expenses, are automatically deleted from this table. They must also be mutual funds with a strong management and long-term strategy, with managers who, preferably, with investment of his own money into the fund, which puts more on our side as small investors. We also note their volatility, advantages of mutual funds and how this compares with their peers.

*      The range of funds: It is based on the fund’s ability to have consistent returns above its class, with a measure of acceptable risk within it and handling fees competitive. All this for each time period being analyzed. 10 is the best rating, 1 is the worst.

*      Average annual return: The average return each year occurred during the time period analyzed. For example, the average return in the last ten years is determined by the total return produced in the last ten years and dividing by ten.

*      Measure of risk: high, moderate and low. Determined based on the fund’s ability to maintain profits in the days when the stock market declines because of general corrections or bear markets. Is also based on the overall volatility of the fund, compared to the volatility of the category to which they belong and the Standard & Poor’s 500.

*      Measuring costs: High, moderate and low, compared to the normal expenditure category.

LEGEND OF THE INVESTMENT CATEGORIES

L.V – Large Cap Value
M.B. – Mid Cap Blend
M.A. – Moderate Allocation
I.L.G. – International Large Cap Growth
S.G. – Small Cap Growth
S.B. – Small Cap Blend
M.C. – Micro-cap

Here are a mutual funds from the list above for detailed study: characteristics, diversification, companies in which it invests, administration, discipline, returns, etc.

Your manager has achieved outstanding returns for over two decades thanks to an extraordinary balance between risk and return. His strategy manages companies with capacity for accelerated growth in the coming years, and sometimes its portfolio companies tend to look inside the fastest growing industries (although this to some extent undermines diversification and adds some risk background).

Although this mutual fund is not for all investors, but for those who have more tolerance for risk and volatility, “it’s worth taking a look.