What is the meaning of global mutual funds? Mutual funds are the act of raising funds from a group of investors for the sole purpose of combining these funds to invest them in various types of markets. The markets in which the investments will be made are the responsibility of the mutual fund manager. Fund managers generally have a benchmark that they use as a guide to determine the areas in which they will invest.
Compared to other types of popular investments, mutual funds have a distinct advantage. Diversification. A wide range of investments can be obtained with a single investment. The fund manager also offers the benefit of professional supervision. People who have neither the time nor the means to invest alone can benefit in this case.
Mutual funds have some disadvantages that we will address now. On-diversification. Sometimes the opposite is true, the problem does not lie in sufficient diversification. In addition, fund managers receive fees and commissions in the event that the fund makes a profit. The price and commissions charged by the best fund managers are also generally quite high. And if the mutual fund pools, they may only lose their reputation and, in the worst case, their jobs. In both cases, they will not pay a penny to the fund.
Since you entrust them with your hard-earned money, questions of trust will arise. At the end of the day, who is really the fund manager? Who is this guy telling me how I should invest my money? Is he really qualified? Or is he a stooge hiding behind a fancy suit? After all, they all vary in their performance stats as well as in their specialties. They could be excellent in their specialties, but you will lose diversification. Also consider the speculative nature of the markets. There will always be losses, the idea of the game is to generate profits more often than losses. This is true for all investments. As such, there are always risks that you get a loss instead of a profit.
In the end, mutual funds are still an excellent form of investment for those who do not know about them. The difficulty lies in choosing the right fund manager and the right company. In general, mutual fund companies that consistently earn profits generate very high fees and commissions, matched with their performance. In my country, Malaysia, the best dogs are Public Mutual and CIMB and they charge high prices for their services. But again, quality is never cheap.