Frequently Asked Questions - Mutual Funds

What is a mutual fund? What kind of advantages do mutual funds offer?

Assets established for the purpose of managing a portfolio of capital market instruments, real estates, gold and other precious materials on behalf of certificate holders with the money to be raised from the public in consideration of participation certificates based on risk diversification principle and trusted ownership.

  • Just like in the world, investment options gradually increase in Turkey. Determining the type of investment that meets the expectations and requirements of an individual, daily monitoring of economic developments after the investment and transition to different instruments whenever required, tracking the due dates of assets in the portfolio, and the times for exercising preemptive rights pertaining to stocks requires extensive time and knowledge. For this reason, mutual funds under the responsibility of professional managers are the best instruments that set the investors free of such burdens.
  • Although the fund is not a legal entity, the assets of the fund is separate from the trustee. In addition, the assets of the fund can not be pledged, given as guarantee or attached by third parties pursuant to the Capital Market Law. In other words , the fund assets’ safety are taken under the protection by law.
  • Diversification of securities , that may be included in the mutual fund portfolio with fixed income and foreign currency based securities and stocks, will enable minimization of risks.
  • Provides the opportunity of investing in securities with high income potential that can not be achieved with small scale savings.
  • Fund price data can be accessed through branches, newspapers, internet and other alternative channels.
  • As the valuation and control of securities, collection of coupons, interest and dividends is done by the fund management, the fund investors are no longer have to track time and source consuming procedures such as due dates, collection, etc.
  • It can be traded in small quantities.

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What is the difference of the Mutual Fund from other products?

Appreciations/depreciations in the fund portfolio are reflected on the value of the portfolio daily. There is no concept of maturity. This, in turn, allows investors to encash all or any part of the fund assets to the extent they need based on advanced price application. For example: Interest will be lost if a deposit account is closed before maturity date.

It is different from Treasury Bonds, government debentures and deposits products basically in that its income can not be predicted in advance.

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What is the difference of Exchange Traded Fund (ETF) from other investment funds?

The management fee of the ETF is lower compared to other funds. Contrary to other funds, they are traded in the ISE as stocks. Fund participation share has two different values, namely, net asset value and transaction value. “Net Asset Value” of the fund is declared at the end of the last session in the market where participation shares are traded on ISE transaction days. “Net Asset Value of the Fund As Indicator” is calculated continuously by the Manager under the responsibility of the Founder within session hours in the market where participation shares are traded on ISE transaction days and is declared every 15 seconds through at least two data providers and the Fund’s website. Transaction price of the fund is the price trading in the ISE Fund Market.

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