What are Mutual Funds?

Mutual Funds - Complete Controller

Mutual funds are investment tools that invest money by gathering multiple investors’ monetary contributions, natural or legal, and pooling them to invest in different investment securities. With the union of multiple investors’ capital, different investments can be accessed under advantageous conditions to obtain the participants’ profitability. Check out America's Best Bookkeepers

What are mutual funds?

When investing in a mutual fund, the money is managed by a management company specializing in managing different investment portfolios. These can be formed by different values ​​such as shares, corporate and public bonds, real estate assets, international securities, other funds of investment, mortgage bills, etc. The composition of the portfolio is defined in the mutual fund contract so that the investor can decide whether or not to participate according to their preferences.

Advantages of Mutual Funds 

Here are the advantages of mutual funds:

  • You can invest from very low amounts.
  • Simplicity: it’s easy to invest in them.
  • The Mutual Funds are issued by Banks and entities audited by the Superintendency of Securities and Insurance, which offers security in the investor’s management.
  • With the daily calculation of the quota, the investor can redeem his capital at any time, differentiating it from a term deposit.
  • Globalization, access to any market.
  • Multiple investment alternatives, which adapt to the risk profile of each person. Accessibility. With a small investment, the investor can access different instruments, to which, due to their value or high transaction costs, he could not opt ​​for as an individual investor. Check out America's Best Bookkeepers
  • Professional management through managers with investment professionals that will maximize the target profitability.
  • The investor does not need to be involved in buying and selling the assets as he would be if he directly managed his investments.
  • They allow access to diversified investments, developing a portfolio according to the level of risk that suits you, integrating fixed income instruments and capitalization instruments that are difficult for individuals to access.
  • You can perform partial or total rescues as many times as you wish; there are no fixed deadlines or expiration dates.
  • They do not have expiration dates or require renewals.
  • If your needs or investment objectives change, you can transfer part or all of your investment to other funds that best suit your new requirements.
  • Tribute only for the real utility that it perceives when redeeming its shares from a mutual fund while the client does not rescue their investments.

 What types of Mutual Funds are there?

In general, mutual funds have varied investment portfolios, so we can find funds that only invest in shares, others that will invest in debt securities, and mutual funds that invest in both types. Check out America's Best Bookkeepers

In general, mutual funds will be invested in these types of investments:

  • Short-term debt investments: public offer values ​​representative of debt, the term of which until their total extinction does not exceed 365 days as of the valuation date of the fund.
  • Medium and long-term debt investments: public offer values ​​representative of debt whose term until their total extinction exceeds 365 days as of the valuation date of the fund.
  • Capitalization investments: public offering values ​​representative of capital, such as shares of public limited companies, mutual funds quotas, mutual fund quotas, among others.
  • Mutual funds that invest in equities or shares.
  • National or international funds.
  • Funds in national currency or other currencies.


Mutual funds are highly recommended for all investors, whether savvy or a beginner. It would be best to consult a financial planner or an investment broker to be sure you are investing in the right mutual fund. However, mutual funds are a lower-risk investment, and as long as you do your research, you can make good choices in mutual funds on your own. Knowing the advantages and the types of mutual funds available is a great start to making good investments.

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