Mutual funds are one of the most popular investment instruments among the public. This comes as no surprise, considering mutual funds offer a simple and practical way to invest. They are easy to understand and don’t require a large amount of initial capital to get started.

What Are Mutual Funds?

According to Indonesia’s Financial Services Authority (OJK), a mutual fund is a vehicle used to pool funds from the public that are managed by a legal entity called an Investment Manager, and then invested into securities such as stocks, bonds, and money market instruments.

The Indonesia Stock Exchange defines mutual funds as a vehicle used to collect funds from investors to be further invested in a securities portfolio by an Investment Manager.

So, in short, mutual funds are a tool for collecting capital from investors, which is then invested in a portfolio of securities by a professional investment manager. In a mutual fund, the money from multiple investors is pooled and managed by professional managers who have expertise in investment portfolio management.

Types of Mutual Funds

In general, mutual funds are divided into several types:

• Money Market Mutual Funds
  Investments are made in money market instruments such as deposits, Bank Indonesia Certificates (SBI), and bonds with maturities of less than one year. This type of mutual fund has low risk and high liquidity.
• Fixed Income Mutual Funds
  Most of the funds are invested in bonds or debt securities. This mutual fund is suitable for investors seeking fixed income with lower risk than equity mutual funds.
• Equity Mutual Funds
  Funds are invested in stocks listed on the stock exchange. This type offers high profit potential but also comes with higher risk.
• Balanced Mutual Funds
  Investments are made in a combination of stocks, bonds, and money market instruments. This type provides better diversification with balanced risk and return potential.

Read: The Advantages of Time Deposits in neobank — From Competitive Interest Rates to Flexibility

Benefits of Mutual Funds

Mutual funds offer various benefits beyond just growing your investment. Here are some of them:

• Investment Diversification
  One of the main benefits of mutual funds is diversification—an investment strategy where funds are spread across multiple financial instruments to reduce risk. In mutual funds, investor money is pooled and invested in a variety of assets such as stocks, bonds, and money market instruments. This spreads out investment risk and reduces the impact of a poorly performing asset.
• Professionally Managed
  Mutual funds are managed by professional investment managers who have the expertise and experience to manage investment portfolios. They conduct thorough analysis and select the right assets to maximize return and manage risk. This is especially helpful for investors who lack the time or knowledge to manage their own investments.
• Easy Access and Affordable Capital
  Mutual funds offer easy and affordable investment access to all levels of society. With a relatively low initial investment, anyone—including those with limited funds—can invest in mutual funds and participate in capital markets.
• High Liquidity
  Mutual funds are highly liquid, meaning investors can easily redeem their investments at any time as needed. This high liquidity provides flexibility for accessing funds without having to wait for long periods.

Note: The above article is not financial advice. Past performance does not guarantee future performance. The public is advised to continue to do due diligence.

Differences Between Mutual Funds and Bonds

One common question when discussing mutual funds is: “What’s the difference between mutual funds and bonds?” While both are low-risk investment instruments, they have distinct characteristics:

• Income Source
  Mutual fund income comes from the returns on the various financial instruments managed by the investment manager. Meanwhile, bond income comes from the interest paid by the bond issuer to the bondholder.
• Risk
  The risk level of mutual funds depends on the type chosen. Equity mutual funds have higher risk but also higher return potential. Bond risk, on the other hand, depends on the issuer’s creditworthiness—government bonds are generally safer than corporate bonds.
• Management
  Mutual funds are managed by investment managers, whereas bonds are purchased and held directly by the investor, without third-party management.

Bank Neo Commerce Mutual Funds: Easy and Profitable Investment

As one of Indonesia’s leading digital banking services, Bank Neo Commerce also offers mutual fund products. These are designed to suit various types of investors.

Before choosing from the available mutual fund products at neobank, customers are encouraged to first assess their risk profile. This helps determine the level of risk they are comfortable with when investing. The lower the risk profile, the lower the potential return—but it also means the fund will be placed in safer mutual fund products.

Read: 5 Easy Ways to Enjoy the Benefits of Gold Investment

How to Start Investing in Mutual Funds at Bank Neo Commerce

1. Download the neobank app from Google Play or the App Store.
2. Open and activate your Bank Neo Commerce account
   Follow the steps and requirements shown in the app to open and activate your account.
3. Choose a Mutual Fund Product
   Open the Mutual Fund feature and discover your risk profile by following the steps in the app.
4. Select the Mutual Fund Product you want
   After knowing your risk profile, you’ll be directed to mutual fund products that match your investor profile. Choose the one you want and start investing.

Enjoy the Benefits!

Mutual funds offer an opportunity to gain profits from professionally managed investments. You can enjoy the returns according to the investment period you set.

Sounds easy, right? Start building your future today by investing in mutual fund products from Bank Neo Commerce’s neobank! The earlier you start investing, the faster you can achieve your dream financial future.

Download the neobank app on PlayStore or App Store and start investing in Mutual Funds now. Maximize your returns by opening a time deposit on the neobank!

For complete information and terms & conditions regarding Mutual Funds, visit the link https://s.id/infomutualfunds & if you want to directly invest in Mutual Funds at neobank, click the link https://s.id/neomutualfunds

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PT Bank Neo Commerce Tbk is licensed and supervised by the Indonesia Financial Service Authority (OJK) and Bank Indonesia (BI), and an insured member of Deposit Insurance Corporation (LPS).