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What is Mutual Fund

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What is Mutual Fund?

Simply speaking, a mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests in specific targets or regions. The risks and profits of investments are shared by many investors

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What's Special about a Mutual Fund?
Professional management:  
  Mutual funds are managed by well-experienced professional managers, who analyze each market and find potential investment targets by means of various leading investment models through professional researches.
Effective risk diversification:  
  “Do not put all of your eggs into one basket.”? Mutual fund is able to allocate your investment into different targets across industries and regions to prevent significant loss in investment due to fluctuations in capital market.
Investing in global market:  
  Through mutual funds, you can easily invest your money into the global market to gain profits and opportunities.
Lower investment costs:  
  Mutual fund collects and manages money from many investors so fund managers, on behalf of a large group investors, can execute trading orders at lower costs.
High Liquidity:  
  You can receive your money within 5~8 days after redeeming your holding mutual funds.
Investment at ease:  
  Investment management and investors’ funds custody are separated. Investor’s funds will be under custodian bank’s custody through a dedicated account to ensure maximum security for investors.
Low entry barriers:  
  Mutual fund divides asset into different units. With minimum lump-sum subscription of TWD$10,000,
you can be one of the investors.
 
The Basic Types of Mutual Funds

A fund can be categorized by many ways, such as stocks, bonds and money market instruments according to its investment targets.

   
Equity fund:
Investing in an equity fund is like owning shares of several companies’. When the portfolio companies do well, stock price usually goes up. On the other hands, when the companies operate badly, stock price falls. Generally, the return and risk of an equity fund are higher than bond fund and money market fund.
 
Bond fund:
The major investments of a bond fund are bonds. Owning a bond is like lending money to the institution who issues the bonds. The income of a bond fund comes from the interests of the bond plus the principal. The risk as well as return of holding a bond fund falls between equity and money market fund.
 
Money market fund:
Money market funds usually invest on currencies or savings, which are comparative secured investments; however, its profits are not as high as equity or bond funds.

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Simply Speaking, Why Should I Invest in Mutual Fund?

Most investors invest in mutual funds because: let professionals manage the funds to earn returns, diversify risks through different investment targets, and allocate their assets to potential markets around the world.

 
 
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