What Are Investment Funds?
What Are Investment Funds?
An investment fund is an official investment vehicle in which investors’ savings are managed by CMB-licensed professional portfolio managers, divided into units, registered with the trade registry, and subject to independent audit.
Advantages of Investment Funds
- A practical instrument that allows you to place buy and sell orders on a daily basis in amounts aligned with your savings. Except for special funds, there are no restrictions on transactions.
- As funds are managed by professional managers, they often offer pricing and flexibility advantages compared to portfolios that individual investors may create on their own.
- Under the current taxation regime, investment funds are generally subject to lower and more practical taxation for individual investors compared to most alternative investment instruments.
- They provide practical solutions tailored to the investor’s risk preferences.
Key Characteristics of Investment Funds
- A fund is independent of the portfolio manager’s and the intermediary bank’s or brokerage firm’s own assets and risks.
- Fund units are safekept on behalf of investors at Takasbank, Turkey’s central securities depository.
- Unlike time deposits, investment funds do not offer a guaranteed return over a fixed maturity. Funds have no maturity; they may be held for any desired period. However, the return realized upon redemption varies depending on the type of fund and the market performance of the underlying assets. As a result, returns may be above or below deposit returns, and depending on the fund type, principal risk may also arise.