Learn about Mutual Funds Savings

Most investors are not professionals. They’re people with families and homes who simply want to achieve a level of comfort and protection for the future. They want to find a safe investment that provides steady and relatively risk-free growth but offers better returns than a personal savings account. A mutual funds savings account is specifically designed for these types of investors.

What is a Mutual Fund?

A mutual fund is a combined collection of people’s assets that are invested in stocks, bonds, and various securities. You can join an already-established mutual fund that is managed by a trusted investment firm. A mutual fund savings account is a passive investment; it doesn’t require any active management by the investors.

Investors make money from mutual funds in three ways. When a stock or bond the fund has invested in pays dividends or interest, those funds must be distributed among the investors. The managing investment firm’s responsibility is to collect those funds from the asset and distribute them to the investors the bank or firm represents.

The second way to make money from a mutual fund is through capital gains. Periodically, the mutual fund managers will sell an asset. The fund managers watch the prices of the individual assets, and when an asset is judged to have reached a price significantly higher than the purchase price, the asset may be sold.

The difference between the purchase price and the selling price is referred to as capital gains. Whenever the fund managers make a sale of an asset, they distribute the capital gains earned to the investors.

The last way to make money is through a fund share price increase. If the fund’s assets increase in price during the time you’re an investor in the fund, you can sell your shares and reap the profits on the increased price.

Why Should I Invest in a Mutual Fund?

Diversification always offers more safety in investment. You’re spreading your investment out among assets that are proven performers in the marketplace. Mutual funds are highly diversified. They offer investment opportunities across many industries without having to choose individual shares or bonds.

Mutual funds are also a convenient investment. It’s managed by a trusted investment firm, and you can set up your account to automatically reinvest capital gains and dividends. The fund is also a low-cost investment. They are designed to operate the same as savings accounts. You can generally buy and sell mutual fund shares without incurring transaction fees.

Invest in Investors Trust

Investors Trust is a global brand representing the ITA group of companies. We’re an international group of insurance companies that aim to provide access to the many global markets through a variety of unit-link investment products.

Investing in a mutual funds savings account through Investors Trust offers our customers freedom, flexibility and security. For more information about any of our investment products, please contact our Investors Trust office in Malaysia.