Every investor must expect a return from the investment they invest. Likewise with mutual fund investors. Basically, every investment has a good profit potential. But of course the rate of return from one investment to another can be different. Such as investing in stocks has a different rate of return from investment in bonds, or other investments. It all depends on the investment objectives. For this reason, this review will discuss the mutual funds investment objectives.
Mutual funds have several different product choices, both in terms of management principles, time periods, and investment allocations. Each of these product choices certainly has different consequences and levels of profit. Investors are free to choose which mutual fund investment destination is considered the most profitable and in accordance with financial capabilities. This is important to minimize risks in the future.
The types of mutual funds available on the investment market today are diverse. Every investment manager offers several different products with different nominal and profit levels. Several types of mutual funds that investors can choose include:
Based on financial principles
Based on financial principles, mutual funds are differentiated between conventional mutual funds and Islamic mutual funds. Conventional mutual funds are managed by investment managers based on applicable economic principles to get maximum profit. Meanwhile, sharia mutual funds must be managed in accordance with applicable sharia principles, through the DSN fatwa in accordance with the product offered.
Based on the time period
Based on the period of time, mutual funds are divided into short, medium and long term mutual funds. The short-term definition is generally less than one year. For example 3 months, 6 months, or 9 months. Medium-term mutual funds generally offer products with a maturity of 1-3 years. These types of mutual funds usually offer higher returns than in the short term.
Read also: Choosing Mutual Fund Investment Period
Meanwhile, long-term mutual funds are offered by investment managers with a term of more than 3 years. Of course, with a longer term, the level of profit offered can be higher than the short and medium term. However, not many investors choose this type of mutual fund. Maybe because there are investments in forms other than mutual funds that are able to provide higher returns.
Based on investment allocation
Conventional mutual fund investment managers are free to allocate investments in any securities portfolio. Meanwhile, Islamic mutual funds are limited to securities portfolios that are in accordance with sharia principles. In addition, investment managers can allocate their capital in stocks, money markets, or portfolios that offer fixed income.
Based on the several types of mutual funds that can be selected, investors can achieve the following mutual fund investment objectives:
Some investors choose mutual funds as a capital liquidity tool. Instead of idle funds, investing in mutual funds can provide benefits without having to bother managing yourself.
Get a return
This is the most common goal for investors who are busy but want to have more capital.
From the investment profits generated, investors can realize their dreams for holidays, buy luxury goods, and so on.
By knowing the purpose of mutual fund investment, you as an investor can adjust what mutual fund products must be taken to realize these goals. So, of the many products offered by mutual fund investment managers, which mutual fund product do you choose?