Basically, transactions in mutual funds are very easy. We just need to find the appropriate mutual fund products, choose the investment manager, read the prospectus, then make a subscription and transfer the funds. We can also buy directly through the investment manager or buy it through an appointed agent (bank). we come to a mutual fund seller, open a mutual fund account, fill out a form, prepare a photocopy of identity, and of course prepare the funds to be invested to buy a mutual fund unit.
As proof of ownership of the unit, we will get a mutual fund certificate of the number of units we buy. There are two types of mutual fund participation units. First, the mutual fund participation unit that can be resold to the investment manager is called an open-end mutual fund. Some mutual funds in the country are in the form of open mutual funds. the opposite is a closed end mutual fund, which is a mutual fund that can only be sold to other investors through the secondary market.
Investment managers are an important element in mutual fund transactions. because when we buy mutual fund participation units, we entrust the management of these funds to them. What is meant by fund management is that investment managers will conduct sale and purchase of shares on the stock exchange, where the results of their management will be reflected in the unit price of an investment commonly known as NAV / NAB (Net Asset Value).
In a mutual fund, the investment manager manages the funds placed on a securities and realizes profits or losses and receives dividends or interest that is recorded in the NAV of the mutual fund.
NAB is one of the benchmarks in monitoring the results of a mutual fund. NAV per share / unit of investment is the price of a portfolio of a mutual fund after deducting operating costs and then divided by the number of shares / unit of investment that has been circulated (owned by investors) at that time. The mutual fund unit is calculated based on the participation unit (UP) and NAV. For example, today the mutual fund X price is IDR 1,300. We plan to buy 1,000 UP, so we need IDR 1.3 million (plus commission / fee). If at the end of the year the NAV price is Rp1,500 and we want to disburse our mutual funds, then our profit is Rp. 200 thousand (minus commission / fee / tax).