An investment share of a mutual fund certifies the owner's right to. Investment unit of a mutual fund. Purchase and redemption of an investment unit
Currently, there are many investment instruments, for the use of which the participant must have a wealth of professional knowledge and practical experience in their use. Investors expecting high returns must have a number of individual characteristics and special skills. Particularly popular in the field of economic activity are mutual investment funds, which are based on the method of trust property management.
Classification of investment funds
Before you get acquainted with the main types, you should find out what investment funds actually are. They represent a model of collective investment, characterized by a unique structure. Funds are property complexes with common ownership of assets, which unite participants with shared ownership. The purpose of creating investment companies is long-term in nature and is aimed at saving and increasing the capital of shareholders.
The actual existence of investment funds and their active development is determined by the fact that a significant part of the population that has free funds does not know how to manage them or does not have the skills to invest correctly. When the economic situation stabilizes, the number of funds increases significantly, but their activity immediately decreases during a global or national crisis.
Today there are the following types of investment organizations:
- shares;
- government;
- mutual;
- check;
- hedges;
- stock exchange.
Institutions of trading importance, which in the Russian Federation are represented in the following forms, are especially in demand among investors:
- Equity funds. These are companies that have been granted the status of a public company. Participants in this area of the market make a profit by investing free funds in such types of assets as stocks, bonds, gold, currency and others. Profit is generated by increasing the value of securities and other financial instruments in which the money was invested.
- Mutual funds. These are institutions that do not have legal status. Interest from financing is the main source of income for the investor. The level of profit depends on the size of the share acquired from the total capital. The formality of the activities of these funds is strictly regulated by Federal Law dated November 29, 2011 N 156-FZ “On Investment Funds”. Consequently, control over the assets of this fund is carried out by special management institutions.
There are also other types of investment funds, but they are either not very effective or are at the initial stage of development. This situation indicates the instability of the state’s economic system or the presence of increased investment risks.
The basic concept of mutual funds: advantages and disadvantages
Investment funds in Russia first became known in 1996. Since then, these two forms of commercial organizations have occupied a large segment of the capital investment market. The reason for the popularity of such investment is its accessibility, that is, every potential investor can count on the opportunity to become a participant in the financial market. Accordingly, many may refuse bank deposits or the services of brokerage houses. In addition, the uniqueness of the companies under consideration lies in the balance between possible risks and expected profitability.
Mutual investment funds are one of the options for merging the free assets of several investors and trust management of shares by highly qualified managers of a special management company. The task of mutual funds is to ensure systematic growth in the value of capital shares, which are also called units. They are registered securities that indicate the investor's rights to a specific part of the fund's property.
This type of asset can be transferred to another person through an inheritance or a gift. In addition, the owner of this security can resell it for the current price at the time of the transaction. The size of a share in an investment fund largely depends on the volume of investments. It is worth noting that each organization’s share contribution has significant differences. The minimum contribution for a share can vary from 2 thousand rubles. To withdraw funds from the fund, the participant will need to sell his share.
Part of the capital can be sold to other shareholders, but the process of finding new buyers is most often carried out by a management company.
Mutual investment funds in Russia have a whole list of unique advantages, among which it is worth noting:
- Professional management. Experienced managers who have the appropriate certificates from the Federal Commission for the Securities Market (FCSM of Russia) are responsible for the effectiveness of the organization’s functioning.
- Low risk. Thanks to competent decisions of managers, capital investments are diversified, thereby reducing the dependence of portfolio investments on falling asset values and other dangers.
- Convenient investment conditions. Loyal and most comfortable conditions for conducting activities have been created for participants. In addition, a shareholder can leave the company at any time.
- High degree of deposit security. A licensed management company, certificates of specialists and state control over the financial activities of the fund are responsible for the absolute protection of investments.
- Availability of benefits in the tax system. The amount of income is not subject to direct income tax.
- Full information. For all fund participants, only current data and indicators provided with constant regularity apply.
- investing is medium- or long-term in nature, so it is possible to get the first profit from investments only after 1 year;
- the management company provides its services for a fee, regardless of the outcome of the transaction;
- Investors have a chance to make money from their investment or be left without a profit.
Conditions for becoming a shareholder
The main rule of a mutual fund participant is to have professional knowledge in the investment field. Taking into account the skills of shareholders, the following funds can be distinguished:- ordinary societies;
- associations of competent investors.
Shareholders who have thoroughly approached earning money in the field of investment, by studying current literature on investment methods, have impressive experience in financing various projects, and also know everything about the foreign exchange and stock markets, can join the society of professional investors. The main factor that will help a participant in doing business is the number of previously concluded successful transactions.
A regular mutual fund is the best option for owners of free assets who previously kept their funds in a standard deposit. In addition, anyone who has material resources, but does not have experience in solving financial issues, can join such an association. About 90% of the Russian population may fall into this category, because they do not show much interest in studying the investment process, but have the desire to increase capital through passive income.
Types of mutual funds
Today there is a wide variety of mutual funds in Russia, which are classified according to certain criteria. Of particular importance are investment funds, which are divided according to the degree of availability into the following types.
Open funds
The assets of the company are securities that have exchange quotations and high liquidity. An investor can carry out a share purchase and sale transaction on any working day of the week. An increase or decrease in the converted share into capital can be carried out without the need for a collective meeting of shareholders. The participant must take into account that the value of his share is calculated daily.
Closed-end funds
An investor can purchase a share only at the stage of forming an investment complex. There are also exceptions, for example, the issue of additional shares, it is at this moment that the opportunity to invest is provided. The shareholder can carry out capitalization only upon completion of the trust management agreement. Closed-end funds have a fixed number of shares, and the issue of new shares is agreed upon at a meeting of the company.
Interval funds
In such an organization, the assets are low-liquidity securities. It is possible to conclude a share purchase and sale transaction only at clearly established time intervals, for example, 4 times a year for 14 days. The actual value of the shareholder's share is calculated at the end of each month or period. When planning investments in interval funds, it is recommended to choose long-term investments, and also take into account such factors as the time of redemption of the share.
It is worth noting that any mutual fund is available for transformation, that is, a closed type can easily become an interval fund or an open closed company. Each of them has unique features, a certain level of profitability and risk indicator.
Prospects for investing in mutual funds
Many potential investors are interested in the question: how much can you earn by investing in shares? Unfortunately, it is difficult to give an exact figure, since regulations governing the activities of funds prohibit analysis of profitability indicators and the use of data as advertising. This decision is determined by the fact that it is not always possible to make a profit as a result of purchasing a share.
For example, an investor, among a huge list of mutual funds, chooses the most reliable organization that has been conducting successful investment activities for several years and pleases investors with good profits. However, unpleasant moments happen when the management company mismanaged material resources. In addition, unexpected economic risks often arise when the shareholder not only loses a share, but also incurs significant losses. Such situations arise when paying a fixed commission for the services of a management company, which is not affected by the results of the transaction.
The above example is an extremely rare occurrence, but every shareholder should remember the possibility of this outcome when entrusting his money to little-known companies. With enviable regularity, investors still receive their income and immediately buy back profitable shares. It is difficult to accurately determine the percentage of profit when investing in mutual funds, but we can say that the amount of profitability exceeds classic investments.
Also, experts do not recommend taking into account the results of the previous transaction. The indicators of the future period do not always correspond to the data of past investments. For example, over the previous period, Sberbank mutual funds pleased shareholders with a 75% profit, but this year the income was only 10%. That is why the investor must remember that the level of profit is not regulated by the legislation of the country, therefore, it depends on the current situation on the market, the period and method of investment.
How mutual investment funds are developing in Russia
Experts were able to carefully study mutual funds around the world and give an accurate answer to the question of the growth of these companies in our country. It should be noted that investment funds trading shares are not as in demand as in Western countries. This trend is associated with the low financial literacy of Russian residents, as well as the fear of falling for scammers, as was the case in the 90s with the MMM financial pyramid. It was these events that reduced the enthusiasm of the population to invest in various projects.
Despite this, the number of mutual investment funds is growing every year, attracting new investors. We can say that this situation is due to the imperfection of the funds, since they appeared in Russia quite recently and cannot boast of impeccable investment legislation. Proof of this is the fairly frequent negative aspects in the regulatory framework.
The overall level of profitability of mutual funds in the country exceeds 20%, which is not a completely bad result. Thanks to marketing approaches, management companies try to attract as many clients as possible by offering favorable terms of cooperation. However, long waits for income and disappointment at low interest rates have a negative impact, thereby reducing the interest of the shareholder to buy new shares.
Step-by-step instructions for investing in mutual funds for a beginner
A novice investor should not be at a loss if he decides to start making money on shares. Buying a share is a simple and quick process, which is practically no different from investing money in a regular banking institution. To join an investment fund, a shareholder must perform the following manipulations:
- analyze all financial instruments and choose the most effective option;
- using modern sources of information (official websites of banks and management companies), find mutual funds where such services are provided;
- fill out a statement of desire to become a shareholder, which will be addressed to the management of the management company;
- after considering the application, obtain bank details for making a deposit equal to the value of the share;
- open a bank account and transfer fees for services to the management company;
- wait for the expiration of the transaction;
- in case of a positive outcome, receive profit to your personal account.
The investor should be aware that the application for the purchase of a share can be multi-use, that is, it allows the investor to purchase shares at different time intervals. In addition, after capitalization of the share, the mutual fund participant can count on further purchase of shares. To start collaborating, you can contact the head office of the management company or contact the manager through the official website.
After concluding the agreement in the office, the shareholder must be informed about the registration of the share within 1 week. In other cases, notice in writing may be delivered within 2 weeks. From the moment of registration of a share in the investment fund, the investor becomes a full shareholder.
Popular mutual funds with favorable investment conditions
The review offers the TOP 3 best mutual investment funds, selected according to the highest level of profitability for the year. Among the companies offering to purchase shares in the combined capital, it is worth noting:
"Uralsib"
This is a management organization that was founded in 1996. Its competence includes a number of non-state pension funds and mutual funds of various types. Currently, Uralsib includes shares of more than 52 thousand investors. The company specializes in investments in such industries as natural resources, energy, precious metals, Eurobonds, shares of fast-growing enterprises, as well as large-scale commodity markets.
The minimum cost of a share in Uralsib varies from 5,000 to 25,000 rubles. Shareholders have attractive business conditions, that is, they have the opportunity to independently choose the direction of investment and background.
A brokerage firm that specializes in securities, investing and stock trading. For beginners, various areas of investment are provided. Shareholders are offered a choice of the following financial instruments: stock indices, foreign markets, bonds and shares. The price of a capital share in the fund ranges from 1000 to 2500 rubles. Among open mutual funds, investors have a wide choice, which is represented by such organizations as “Eurobonds”, “Raw Materials”, “Foreign Shares”, “Foreign Property”. Units in such funds have specific expiration dates, ranging from 12 months or more.
Gazprombank "Asset Management"
The organization belongs to a number of management companies focused on interaction with individuals, non-state pension funds, insurance companies, as well as educational and cultural centers. Gazprombank has 18 mutual investment funds under its purview, including 11 open, 6 closed and 1 interval. The National Rating Agency assigned the highest reliability status to the management company.
conclusions
From the above information we can conclude that investment in the energy industry brings impressive income to shareholders. In addition, investing in stock indices under favorable market conditions can increase your investment by 100%. However, every investor must take into account that it is impossible to simply buy a share and make a profit as a result. This will not happen even with the most popular mutual funds, because in order to achieve success, the management company must accurately calculate the strategy and monitor all stages of the investment process. Any wrong decision can lead to the loss of the investor's capital.
A mutual fund is a unique form of collective investment of funds with subsequent receipt of profit. The funds of many investors are pooled into a single fund and some assets are purchased with it. They are bonds, shares, deposits, real estate, that is, the standard gentleman's set of financial instruments permitted by law. The activities of the fund's employees are aimed at obtaining maximum profit using the funds received under management, so that the fund's assets increase and shareholders can receive the profit they are entitled to.
Pros of a mutual fund
Starting capital may be small. Some funds are ready to accept a contribution in the amount of one thousand rubles. You don't have to study the market on your own. This is already being done by specially trained people working in the fund.
How it works
Not any organization, much less can create a mutual fund. This is a licensed activity. The license is issued by the Federal Service, which is responsible for control over the financial markets of the Russian Federation. This body both issues a license and controls the subsequent activities of the mutual fund. The inspection takes place at least once every three years. That is why the fund must conduct all operations correctly and work within the framework of the law.
As soon as a license is obtained, the fund can begin to attract investors (shareholders). These can be both citizens and organizations. Each person can buy shares for a certain amount of funds, and this amount is at the disposal of the managers. The fund, with the money of investors, can buy securities that are in free circulation and, by making such transactions, receives a profit, which leads to an increase in the value of the fund’s assets, which means the value of the shares increases.
Pai - what is it?
An investment share is a registered unit that records the fact that the investor has invested a certain amount of money in the fund. In other words, the investor thus fixes his own right to a share of the mutual fund’s property. Documentary ownership is formalized through an entry on the depositor’s personal account, which is opened in the mutual fund register. The number of shares an investor will own will likely be a fraction.
Change in unit value
The value of shares, like the value of any other asset, is subject to investment risks. The share does not have a nominal price, but its estimated value is calculated at certain intervals. Thus, open-end mutual funds calculate the price of the unit every working day (on holidays and weekends the cost is equal to the price for the last working day).
An interval mutual fund does this on the last day of the interval (the period when you can redeem and purchase shares) and the last working day of the month. Closed-end mutual funds calculate the cost on the last working day of the month and the day following the last day for submitting applications for the purchase of additional shares. All operations for the purchase/sale of shares of this fund are carried out based on their price on the last day when applications were accepted.
The value of the shares is calculated simply: the price of the mutual fund's net assets (NAV) is divided by the number of shares. Information about them can be viewed in the register of fund investors. The net assets of a mutual fund are determined by deducting the amount of the fund's liabilities from its assets (funds in the fund's deposits and accounts).
Profitability Guarantee
There is no guaranteed return on mutual funds, like other financial instruments. Everything is determined by the amount of supply and demand for stock assets. And mutual funds cannot provide guaranteed returns. Moreover, the information about the mutual fund cannot provide any guarantees regarding the profitability of the management company’s work in the future. This is described in more detail in Article 51 of the Federal Law “On Investment Funds”. However, the future investor must understand that only low-yield instruments, such as bonds, can guarantee profit. You just need to minimize the risks at the selection stage, and then the profitability of mutual funds will help increase your funds.
How is profit generated in the fund?
If an investor decided to invest one hundred thousand rubles in the fund, and the cost of one share at that moment was four thousand rubles, then he will be able to purchase twenty-five shares. Let’s say that after some time the fund’s assets have risen in price, and the cost of one share begins to equal six thousand rubles. The cost of all shares acquired by the investor in this case began to be one hundred fifty thousand rubles. So he was able to earn fifty thousand rubles without taking into account commissions and taxes. This is how each of the shareholders can receive their profit using mutual fund shares.
Rules for successful investing
The essence of the rules is simple. You should invest for the long term. A mutual fund is a long-term investment instrument (from two years). Therefore, all invested funds should lie quietly for the next two to three years and generate profit. Such investing is good because it is not affected by short-term fluctuations to which the stock market is so susceptible. This provides a higher level of profitability.
This also leads to the second rule: you should invest free funds that will not be needed in the near future. Investments for a short period of time are possible and, perhaps, even profitable. But this approach does not guarantee income from each investment in a mutual fund. You should invest in reliable mutual funds, reviews and ratings of which indicate the possibility of making a profit.
Rating of mutual funds
It is not difficult to obtain information about the performance of a particular fund. It is in the public domain. But when studying it, it is worth considering a number of points.
- What is the rating of the management company in terms of the volume of funds raised over the last year? Two years? Three? When studying the rating of mutual funds, you should understand that the investor invests funds for a long period of time, and the security of the investment and the success of the investment will depend on the ability of the management company to manage investors’ funds.
- What is the management company's net asset value rating? This value indicates how much funds of fund participants are managed by this management company. And the higher it is, the higher the popularity of the management company, and therefore the greater the trust in it.
- What is the rating of mutual funds based on the volume of funds raised? It is better to check this indicator for a year and for three years.
- What is the mutual fund's rating based on net asset value?
- What is the mutual fund's profitability rating? It is this rating that attracts the attention of investors in the first place. This indicator ranks funds according to the amount of profitability they were able to achieve over a certain period of time. For example, the management of Sberbank mutual funds led to the fact that the Sberbank - Global Internet fund produced a return for the year of 49.91%.
How to buy shares?
There is nothing complicated here. It is enough to be in the office of the management company or contact its intermediary. The role of intermediary is often played by investment companies or banks. There you will be asked to fill out and sign the following documents:
- Application for opening a personal account. When a management company has several funds, and the investor decides to make contributions to more than one fund of this company, then accounts must be opened for each contribution.
- Registered person's profile.
- Application for the purchase of investment shares.
All documents are drawn up and signed in triplicate, and when working with an intermediary - in four. Of course, there is a bit of hassle with the papers. After a couple of days, the management company will receive an order to purchase shares with all the details.
Sale of shares
This action is similar to purchasing. You will also have to visit the office of the management company and write a statement, in this case about repayment. Usually, only a passport is required from the documents, but information about the number of shares owned by the investor and the personal account number are sometimes required. Therefore, it is better to go with a full package of documents.
It is worth remembering that sales and purchases from different mutual funds are carried out in different ways, or rather, at different times. Open-end funds, which are the majority, will allow the investor to sell on any business day, interval - at the time the interval opens, closed - when a mutual investment fund is formed or additional shares are placed. But there may be exceptions.
Sales and purchases of shares using a broker
Transactions with shares through a broker have their advantages.
- The purchase of shares of closed-end and interval funds is possible on any day when the exchange is open.
- It is possible to avoid premiums when purchasing and discounts when selling shares.
- Speed of execution of an investor's request.
- There is no need to get to the management company's office.
However, there are also disadvantages. Not every mutual fund lists its shares on an exchange. Promstroybank, Metropol, Interfin Capital, Uralsib are examples of management companies listed on the stock exchange. Sberbank Asset Management, whose mutual funds are listed on the stock exchange, is also one of the largest management companies. Such shares do not have the highest liquidity and therefore the spread will be high. Instead of premiums and discounts, there will be commissions for the exchange and the broker (even if they are several times lower), as well as a fee, although not always, for depository services.
Mutual Fund. Banks
Many banks offer the “Deposit plus Mutual Fund” service. Thus, when placing funds, the investor places part of them at interest in the form of a deposit, and the rest is used to purchase shares of mutual investment funds managed by the management company of the same bank. Whether this is good or bad depends on the work of the management company. After all, if it performs well, the return on the shares will exceed the interest on the deposit, which, of course, will bring joy to the investor. Otherwise, the investor will regret the lost profit that he could have received when he placed all his available funds in the form of a deposit with interest.
Taxation
You will only have to pay when the shares are redeemed. And this is the only payment that needs to be “gifted” to your favorite tax office. Profit is easy to calculate - it is the difference between the current value of shares and the cost of purchasing them. Typically, the calculation and withholding of this tax from individuals is the responsibility of the management company. This means that the investor does not have to fill out a tax return on his own. For residents the tax will be 13 percent, for non-residents - 30 percent.
Shareholder expenses
There are two main types of commissions practiced in mutual funds.
- A commission that increases the cost of a share upon purchase (purchase premium). It should not exceed one and a half percent of the estimated value of one share. Some management companies do not charge it at all.
- A commission that reduces the price of a share upon sale (sale discount). It should not exceed three percent of the estimated cost.
Remunerations for the management company, appraiser, auditor, registrar, depository also belong to the expenses column. But they all lie within a few percent and are taken into account when calculating the value of shares.
Main players
- Uralsib. Mutual funds: “Uralsib First”, “Uralsib Perspective Investments”, “Uralsib Eurobonds”, “Uralsib Financial Sector”, etc. Recently, there have been few positive reviews about Uralsib funds, and all of them are concentrated on non-core forums. The Uralsib management company, whose mutual funds initially showed very good returns, is now being sharply criticized by investors. Many investors believe that they could achieve much better results in terms of profitability on their own.
- VTB mutual funds: “VTB - Eurobond Fund”, “VTB - Stock Fund”, “VTB - Balanced Fund”, “VTB - MICEX Index”, “VTB - Telecommunications Fund”, etc. VTB funds vary in profitability, but many complaints are received for customer service. Therefore, when considering VTB mutual funds as an investment instrument, you need to be prepared for this.
- Sberbank's main management company is Sberbank Asset Management. Mutual Funds: “Sberbank - Natural Resources”, “Sberbank - Financial Sector”, “Sberbank - Europe”, “Sberbank - America”, “Sberbank - Gold”, etc. This management company has proven itself to be reliable, which is not surprising.
A few questions about mutual funds
Is it possible to donate shares? Yes, it's possible. It is enough to conclude a standard agreement in ordinary written form.
Can shares be inherited? Yes, they can, in general order. The Civil Code of the Russian Federation describes in detail how this is done.
Conclusion
So, mutual funds are a great way to invest and increase your funds. The main thing is to choose a worthy fund. When comparing a mutual fund and how to invest, a novice investor should choose the first option. After all, in addition to the advantages described above, there are additional ones:
- You can invest a small amount of money and get the benefits of the most profitable instruments (index portfolio, real estate and others).
- An investor, when investing money in mutual funds, trusts management to professionals (in this regard, a fund is similar to trust management).
- Although investing in a mutual fund does not allow you to use all the opportunities of the securities market yourself, the investor frees up his time for other things. And this, you see, is also a huge plus.
In other words, if an investor does not like to deal with all the intricacies of the securities market, but wants to invest money, then investment mutual funds are exactly the tool that will allow not only to preserve, but also to increase savings.
Investment share- (In accordance with Federal Law N 156-FZ “On Investment Funds” dated November 29, 2001) a registered security certifying its owner’s share in the ownership of the property constituting a mutual investment fund, the right to demand proper trust management from the management company mutual investment fund, the right to receive monetary compensation upon termination of the trust management agreement of the mutual investment fund with all owners of investment shares of this mutual investment fund (termination of the mutual investment fund).
An investment share of an open-end mutual investment fund also certifies the right of the owner of this share to demand from the management company the redemption of the investment share and payment in connection with this of monetary compensation commensurate with his share in the right of common ownership of the property constituting this mutual investment fund on any working day .
An investment share of a closed-end mutual investment fund also certifies the right of the owner of this share to demand from the management company the redemption of the investment share and payment in connection with this of monetary compensation commensurate with his share in the right of common ownership of the property constituting this mutual investment fund, in cases provided for by this Federal Law, the right to participate in the general meeting of owners of investment shares and, if the rules of trust management of this mutual investment fund provide for the payment of income from the trust management of the property constituting this mutual investment fund, the right to receive such income.
In fact, the shares of a closed mutual fund are redeemed upon expiration of the fund’s validity period. In order to provide shareholders with the opportunity to “enter” and “exit” at any time convenient for them, management companies organize exchange trading of shares for their funds.
Each investment share certifies the same share in the right of common ownership of the property constituting the mutual investment fund, and the same rights.
An investment unit is not an issue-grade security. The rights certified by the investment share are recorded in non-documentary form. The number of investment units issued by management companies of open-ended and interval mutual investment funds is not limited. The number of investment units issued by the management company of a closed-end mutual investment fund is indicated in the rules of trust management of this mutual investment fund.
The investment unit has no nominal value. The number of investment units owned by one owner can be expressed as a fraction.
The issue of securities derived from investment units is not permitted.
Investment shares are freely circulated upon completion of the formation of a mutual investment fund. Restrictions on the circulation of investment shares may be established by federal law. Accounting of rights to investment shares is carried out on personal accounts in the register of owners of investment shares and, if provided for by the rules of trust management of a mutual investment fund, in securities accounts of depositories, for which, for these purposes, personal accounts of nominal holders are opened in the register of owners of investment shares. In this case, depositories, with the exception of depositories that record rights to investment shares traded through a trade organizer, do not have the right to open securities accounts for other depositories that perform the functions of nominal holders of securities of their clients (depositors).
Notes
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See what “Investment share” is in other dictionaries:
Legal Dictionary
Investment share- 1. An investment share is a registered security that certifies its owner’s share in the ownership of the property constituting a mutual investment fund, the right to demand proper trust management from the management company... ... Official terminology
INVESTMENT UNIT- a registered security certifying the right of the investor, upon presentation by him to the management company, of a demand for the redemption of an investment share to receive funds in the amount determined based on the value of the property of the share investment... ... Encyclopedia of Russian and international taxation
1) part of the property complex constituting a mutual investment fund, the trust management of which is carried out by the management company for the purpose of their growth and in the interests of third party investors who have acquired the right to individual investment fund: 2) registered... ... Encyclopedia of Lawyer
INVESTMENT UNIT- (English investment share) – a registered non-issue security certifying: its owner’s share in the ownership of the property constituting a mutual investment fund (UIF); the right to demand from the company managing it proper... ... Financial and credit encyclopedic dictionary
A registered security certifying the right of the investor upon presentation of a demand for redemption of the I.p. to the management company. to receive funds in an amount determined based on the value of the mutual investment fund’s property as of the date... ... Encyclopedic Dictionary of Economics and Law
investment share- according to the Decree of the President of the Russian Federation On additional measures to improve the efficiency of the investment policy of the Russian Federation dated July 26, 1995, a registered security certifying the right of an investor upon presentation to the management company... ... Large legal dictionary
Investment share- – a registered security certifying the right of its owner to demand from the management company the redemption of the investment share owned by him in accordance with the rules of the fund... Stocks and bods market. Glossary of basic terms and concepts
Investment share (In accordance with Federal Law No. 156 Federal Law on Investment Funds dated November 29, 2001) a registered security certifying its owner’s share in the ownership of the property constituting a mutual investment fund ... Wikipedia
INVESTMENT UNIT- INVESTMENT UNIT... Legal encyclopedia
This is a registered security certifying the right of its owner to a share in the property of a mutual fund. An investment share gives the right to demand from the management company proper trust management of the mutual fund, the right to receive monetary compensation upon termination of the trust management agreement (mutual fund activities). The owner of the units receives income not in the form of a fixed percentage or dividend, but in the form of the difference between the purchase price and the sale price of the unit as a result of the increase in the value of the fund's property.
The management company must redeem investment units at a price determined by dividing the fund's net asset value by the number of investment units outstanding.
Depending on the time frame within which the management company is obliged to redeem the investment unit, mutual investment funds are open-ended, interval and closed. Open-end mutual fund is a fund in which the management company undertakes to redeem the investment units issued by it at the request of the investor on any business day established by the rules of the mutual fund. Interval mutual investment fund- this is a fund in which the management company undertakes to redeem investment units issued by it at the request of the investor within the period established by the rules of the mutual fund, but at least once a year. In an interval fund, you can buy or sell shares only during the opening interval. Closed-end mutual fund- this is a fund in which the management company does not undertake the obligation to redeem the investment shares issued by it at the request of the investor before the expiration of the trust management agreement. In a closed-end mutual fund, a share can be redeemed only after the expiration of the trust management agreement for the fund.
Mutual fund managers are required to publish fund performance indicators (net asset value and share value) in the media and on the Internet daily for open mutual funds and quarterly and before each opening period for interval mutual funds. Management companies report monthly to the Federal Securities Market Commission and quarterly publish in the press an expanded list of indicators, including the composition and structure of the investment portfolio and information about their own capital.
The management company invests investors' funds in strict accordance with the investment declaration published in the rules and prospectus of the fund. The composition and structure of assets of mutual investment funds must comply with the requirements of the Regulations on the composition and structure of assets of mutual investment funds, approved by Resolution of the Federal Commission for the Securities Market dated August 31, 1999 No. 5. According to the Regulations, the assets of open-end mutual investment funds can comprise state and corporate securities securities of the Russian Federation, securities of constituent entities of the Russian Federation and local governments, securities of foreign states, securities of foreign joint-stock companies, as well as funds in domestic and foreign currency in bank accounts and deposits. In addition to the assets listed above, the portfolio of interval and closed-end funds may include real estate and rights to it.
The asset structure of an open mutual fund must simultaneously meet the following requirements:
- the estimated value of securities of one issuer (with the exception of government securities of the Russian Federation) should not be more than 20% of the value of the assets of an open-end mutual investment fund;
- the estimated value of government securities of the Russian Federation of one issue should not be more than 35% of the value of the assets of an open-end mutual investment fund, with the exception of cases of their acquisition as a result of innovation;
- the total estimated value of securities that do not have recognized quotations should not be more than 10% of the value of the assets of an open-end mutual investment fund;
- the total estimated value of securities of foreign countries, shares of foreign joint-stock companies and bonds of foreign commercial organizations should not be more than 20% of the value of the assets of an open-end mutual investment fund;
- funds placed in deposits in one bank should not account for more than 25% of the value of the assets of an open-end mutual investment fund.
The asset structure of an interval mutual fund must simultaneously meet the following requirements:
- the estimated value of securities with recognized quotes and (or) funds in bank deposits should not be more than 35% of the value of the assets of the interval mutual investment fund;
- the estimated value of securities of one issuer (with the exception of government securities of the Russian Federation, housing certificates) should not be more than 30% of the value of the assets of the interval mutual investment fund;
- the estimated value of government securities of the Russian Federation of one issue should not be more than 35% of the value of the assets of an interval mutual investment fund, with the exception of cases of their acquisition as a result of innovation;
- the estimated value of real estate objects and rights to real estate should not be more than 5% of the value of the assets of the interval mutual investment fund;
- the total estimated value of securities that do not have a recognized quotation, real estate objects and rights to real estate can be no more than 65% of the value of the assets of the interval mutual investment fund;
- the total estimated value of securities of foreign countries, shares of foreign joint-stock companies and bonds of foreign commercial organizations should not be more than 20% of the value of the assets of the interval mutual investment fund;
- funds placed in deposits in one bank should not account for more than 25% of the value of the assets of the interval mutual investment fund.
Mutual investment funds have been actively operating on the Russian securities market since November 1996. Currently, more than 40 mutual investment funds operate on the market. The number of mutual funds has been growing recently, and this is no coincidence. Today, mutual funds are the most effective service for investors who do not have the opportunity to independently place their funds on the financial market. It allows individuals to receive the same benefits from investments in financial assets that large investors receive: banks, investment companies and funds.
Positive results of mutual fund activity in the securities market include the fact that the value of assets of Russian mutual funds in the first half of 2003 exceeded $1 billion. But what is more important is not even the absolute numbers, but the growth rate. The increase in assets over the year was almost double.
Investment share - what is it and how to manage it
An investment share is a special security assigned to the owner individually. It determines the owner’s share in the property that forms part of the mutual investment fund (UIF); provides him with the right to receive compensation in monetary terms upon termination of the operation of the mutual fund and to demand from representatives of the company managing the mutual fund the appropriate actions aimed at its effective management.
Features of the investment unit
An investment unit (IP) has the following features:
No face value. Despite the fact that an individual entrepreneur is essentially a registered security, it does not have a base value as such. At the initial stage of organizing an investment fund, its managers sell shares at a pre-agreed price. That is, its level is not formed by market methods, but is set by the founders depending on the needs of the fund.
Lack of free circulation. An investment share is not an object of stock exchange speculation. It is not available for free sale on trading platforms. Only the founders of the mutual fund have the right to sell it, and only they can buy investment shares from the owners.
No payments. The owner of the individual entrepreneur does not receive any dividends or interest from it during the period of his ownership of this security. He can receive his profit from the investment share only through the sale of its management organization.
Advantages of an investment unit
The main advantages of investing in mutual funds for a private investor (individual) are:
Opportunity to participate in the circulation of various securities (state securities, bonds and shares of domestic Russian companies).
Reducing the risk of losses associated with unprofessional management of monetary assets.
There is a high probability of making a profit due to the diversification of mutual fund investments.
A source of passive income, since the shareholder does not take any active actions or decisions aimed at making a profit, but only owns a certain number of shares.
Preferential taxation. The founders of mutual funds are freed from the need to pay income tax to the treasury. Owners of investment units are only required to pay 13% of the income received from the sale of their assets.
Formation of the value of an investment share and its calculation
The cost of an investment unit is directly dependent on the effectiveness of investments made by the mutual fund. If mutual fund investments generate income, like an investment in scrap metal, then the cost of investment shares increases, and the final price for their redemption by the management company increases accordingly. If the investment did not live up to expectations (i.e. did not generate income), then the redemption price falls and the owner of the individual entrepreneur incurs direct losses.
Information about the value of a mutual fund share is not considered a trade secret and is therefore in the public domain. Typically, data on the fund's performance is published in the media, and shareholders can see specific financial results from investing their funds.
The price of an investment share is calculated using a fairly simple formula. To do this, the total financial assets of the fund minus all mandatory expenses are divided by the number of units sold. The resulting number will be the current cost of the IP.
Purchase and redemption of an investment unit
An investment unit does not have any set maturity; its “life expectancy” is determined by the life of the fund. Therefore, if there is a need to urgently sell your share in a mutual fund, then you do not need to wait for any specific moment. In open-ended funds this is done daily. If the mutual fund is an interval type, then you will have to wait for the agreed deadlines.
The investment share is redeemed at its current value at the time of approval of the application. When selling an individual entrepreneur, the shareholder is somewhat limited in his rights. He does not have the right to sell his part of the asset to the highest bidder. All shares have the same value. They can only be redeemed by the management company itself, and its representatives subsequently decide to whom to offer the released securities.
You can also buy securities at current prices directly from the founder by submitting the appropriate application.
Operations with investment units
With an investment share, as with any other security, the following operations are performed:
Purchase and redemption (see above).
Conversion is the transformation of investment shares into shares of another mutual fund within the same management organization.
Donation is a gratuitous transfer of ownership to another person on the basis of a gift agreement. Ownership of an individual entrepreneur is formalized by re-registration.
Inheritance is the transfer of ownership to one’s heirs upon the death of the owner transferring shares on the basis of a will.
Mutual investment funds have only recently begun to explore the Russian market. But statistics show that every year an increasing number of individuals, that is, ordinary citizens, prefer this form of investment.
