An investor that purchases individual stock is essentially placing ‘all his/her eggs in one basket’ hence can become exposed to greater risk in event that the stock value declines. A mutual fund invests in a diversified portfolio of assets which minimizes the risk of the fund.

No, mutual funds invest in securities such as stocks, bonds and financial instruments whose yields and values fluctuate with market conditions.

• Distribution
• Capital Appreciation

Mutual Funds are investments in financial securities with fluctuating values. The value of the stocks in a fund’s portfolio can rise or fall based on general economic conditions and the fortunes of the particular companies that issue those stocks.

Growth Funds seek maximum capital appreciation and carry high risk.

Money Market/Income-type Mutual Funds seek capital preservation and carry low risk.

The higher the risk, the greater the return to the investor and vice versa.

To reduce risks, mutual fund investments should constitute part of an overall portfolio which ought to be spread among:

• Different companies
• Different industries

This is known as diversification and is the principle upon which mutual fund is based.

A portfolio is two or more investments which are not similarly affected by various risk factors. If the price of an investment drops because of the influence of a risk, the price of another investment may rise, thus reducing the impact on the total investment.

The risk on a portfolio is generally lower in comparison to the risk on a single investment.

A mutual fund states the kind of portfolio it seeks to construct and outlines how risk factors are likely to affect such a portfolio.

Yield is the income per unit paid to a unit holder from dividends and interest over a specified period of time.

Total Return is a measure of the change in total value from the beginning to the end of a specified period, usually a year, including distributions paid to unit holders.

This measure includes income received from dividends and interest, capital gains distributions and any unrealized capital gains or losses.

Mutual Funds are not covered by Depositors’ Insurance as is the case with Bank Deposits. The risk is that of the investor.

By comparing the performance of the fund to one or more securities market indices such as S&P 500 (Benchmark for the SavInvest US Dollar Capital Growth Fund), BSE100 (benchmark for the India component of the SavInvest India Asia Fund), the MSCI AC (All Country) Asia Ex Japan Index (benchmark for the Asia component of the SavInvest India Asia Fund) and T&T Composite Index (benchmark for the SavInvest Capital Growth Fund)

Mutual Funds provide a high level of liquidity to investors. An investor who submits a redemption form by 11am on any business day can receive payment within 5 business days.

This depends on the type of Mutual Fund:

• For a Capital Growth Fund, it is advisable to keep an investment for the medium to long-term (approximately a minimum of  3-5 years)
• For a Money Market Fund, it is advisable to keep an investment for the short-term (approximately a minimum of 3 months-1 year)

Many types of funds work best when allowed to ride out the ups and downs of market cycles over long periods of time.

Fees include the following:-

• Trustee
• Fund Administration
• Investment Management
• Distribution

These fees are calculated as a percentage of the Net Asset Value (NAV) of the Fund and are paid on a quarterly basis.

Management Fees are paid from the Fund’s Assets and are reflected in the Bid and Offer prices.

In contrast, most sales charges are deducted from the investor’s initial investment.

By taking the total number of units he/she owns and multiplying these by the Fund’s Net Asset Value (NAV) per unit (or Bid Price). He/she should compare today’s value against his beginning value. Bourse provides updates of NAVs of a daily basis. They can be found on our website under the “Current NAV Prices” tab and are published weekly on Monday’s Express Newspaper on page 10

One MAIN Account holder and up to a maximum of three joint parties are allowed.

No, accounts can only be opened for individuals over the age of 18 years.

For an individual account, the legal representative of the unit holder becomes the rightful owner of the units.

For a joint account, the other party/parties become(s) the rightful owners.