Mutual fund

What is a mutual fund, why is it worth investing in it and what should be kept in mind?

Why invest in mutual funds?

A simple approach

Units are relatively easy to buy or sell, making them highly liquid investments. For certain types of assets, such as large office buildings, real estate funds are often the easiest way for retail investors to participate in such an investment.

Security

The assets in the mutual fund are segregated from the assets of the management company. There is therefore no risk to the unitholders of the fund arising from the insolvency of the management company. Legislation defines strict limits and rules for the management of mutual funds. Compliance with the rules in the management of mutual funds is monitored by the risk managers of the mutual funds as well as by supervisory authorities and auditors.

Transparency

To maximise transparency, management companies publish a variety of information that is useful to unitholders. For mutual funds, they publish regular reports on the management of the assets in the fund, which describe details of the state, change and development of the assets in the fund.

What types of mutual funds are there?

Investment decision taken - what next?

Read our blog to find out, for example, where or how you can invest in mutual funds.

Mutual Fund Investor's Guide

Read our guide to the basic principles of investing that every investor should know.

Mutual funds managed by Erste Asset Management GmbH, through its Slovak branch

Real estate funds

How to invest in mutual funds?

What do I need to keep in mind when investing in mutual funds?

Market risk

One of the most important risks associated with investing in mutual funds is market risk. Investing always carries with it the risk of loss. If the market does not perform positively, it is possible that your investment will end up in a loss. 

Cost

Nothing is free, and this is also true when it comes to investing. Investing in mutual funds comes with a number of fees. The most common fees include entry, exit and ongoing fees. There are other fees that are not as common, such as performance fees. It is important for an investor to have an overview of all the fees of the fund in which they are investing or wish to invest.

Other risks  

There is more than just market risk associated with investing in mutual funds. For example, there is also currency risk, interest rate risk, liquidity risk or issuer risk. It is important for investors to be aware of these risks and consider their impact when investing.

Taxation of income

The proceeds from the redemption of the units are subject to income tax at the rate of 19% under the Income Tax Act. This tax is automatically withheld by the management company from Slovak mutual funds.

More information

Understanding the risks of the fund - no risk, no gain

 

Read our blog to learn more about some of the risks associated with investing in a mutual fund.

Compound interest - how to make interest work for you

Read our blog on compound interest. For example, find out what compound interest is and how to use it to your advantage.

What types of funds are there?

 

In this blog, the author discusses, for example, a comparison of mutual funds and ETFs or describes which securities funds invest in.

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This is a marketing communication. Please refer to the fund's Statute, the fund's Sales Prospectus and to the Key Information Document before making any final investment decisions. They can be obtained in Slovak language at all sales points of the management company and at www.erste-am.sk.

The mutual funds are managed by Erste Asset Management GmbH, with registered office at Am Belvedere 1, 1100 Vienna, Austria, registered in the Commercial Register of the Commercial Court of Vienna under registration number 102018 b, which is doing business in the territory of the Slovak Republic through the organisational unit Erste Asset Management GmbH, pobočka Slovenská republika, with registered office at Tomášikova 48, 832 65 Bratislava, IČO: 51 410 818, registered in the Commercial Register of the Municipal Court of Bratislava III, Section: Po, Insert No.: 4550/B. Investing in mutual funds is also associated with risk. The value of the investment may also decrease and there is no guarantee of a return on the amount originally invested. Past returns on an investment in mutual funds are no guarantee of future returns.