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Mixed investment funds

Investing in mixed investment funds

Before we decide to invest in participation units or certificates, we should clarify our preferences and expectations and seek the necessary information about the fund and the fund manager.

Each retail investor should take into account the fact that financial investments are subject to a certain level of risk, which means that they may incur a loss. In order to limit this risk, it is always necessary to determine what level of loss we can accept and, based on this assumption, make the right choice.

Before entering an investment fund, you should:

Specify the purpose of the investment, i. e. what we save. Depending on the goals of saving money, investing through funds provides greater opportunities to diversify the expected effects and the risk of saving.

Really evaluate your financial, family and professional situation.

Specify the time horizon for cash investment in participation units or investment certificates. We must remember that investing in funds is seen rather as a long-term investment.

As a matter of principle, the funds are geared towards long-term profit rather than speculation. It is known that the shorter the investment horizon, the smaller the share in our portfolio should be, which reduces the risk of periodic fluctuations. If we are planning an investment for a short period (up to 1 year), then a money market fund will be appropriate.

Medium term (1-5 years) investors should rather choose the money market bond fund. Stock funds, due to the high investment risk, will be the most appropriate choice for a long investment period (over 5 years).

Assess the real propensity to bear the investment risk and what level we are able to accept. Remember that a high level of risk is associated with a higher rate of return.

Determine the level of profit we expect.

Mixed investment funds

Mixed investment funds invest in different asset classes, e. g. equity securities (including stocks), fixed-income securities (bonds, money market instruments).

Categories of mixed investment funds

Among the mixed funds, the following categories of funds are distinguished: 

1) Funds with capital protection, for which it is a fundamental principle of the investment policy to seek to safeguard against a unit or investment certificate falling below a certain level by allocating the investment portfolio to equity securities, derivatives and fixed-income securities (where the level of collateral may be constant or subject to constant or fluctuating collateral, in accordance with the rules laid down in the fund's statutes, prospectus or prospectus).

2) Stable growth funds, for which the effective participation of shares and other equity securities in assets should not exceed 40%.

3. Balanced funds, which must meet one of the following two conditions:

the effective participation of stock and other equity securities in the assets of the fund should not be less than 40% and greater than 60%,


the effective stock and other equity securities in assets should not be less than 30% or more than 70% and the fund should have a benchmark that can be mapped into a portfolio of investments in which the stock and other equity securities is between 40% and 60%.

4) Active and selective funds for which the stock of and other equity securities in the investment portfolio is in a broad range, not included in the other categories of mixed investment funds.

5) Mixed funds - other. This category includes other mixed investment funds which cannot be allocated to other categories.

The use of derivatives and investments in participation units of a mutual investment institution shall not result in the minimum or maximum exposure of the fund to the stock market being exceeded the thresholds for a given class.

Mixed investment funds also include the following categories defining geographical specialisation:

1. Domestic market funds
2. European market funds
3. US Market Fund
4. The Asia-Pacific funds
5. Other funds (including, inter alia global funds, emerging markets and funds from other regions or without regional specialisation)

Geographical specialisation is determined on the basis of the origin of the issuers of securities in the fund's investment portfolio. The stock of financial instruments issued by entities domiciled in a given country (item 1) or region (items 2-5) should constitute at least 66% of the fund's assets.


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