The primary objective of mutual investments is obtaining financial benefits from such action. Investment funds act not only as investors but also as financial agents or issuers. Therefore, they represent the demand as well as the supply for money.
The participants who collectively invest their money in the fund may be individuals – natural persons as well as legal entities and entities without legal personality. The fund itself, however, must take the form of a legal entity.
The fund in question is an institution intended for making mutual investments, which gathers financial means from investors. Thereby, it has much larger spectrum of opportunities than each of the investors acting independently.
Large assets allow for different sorts of investments (e.g. deposits) and, in consequence, the decrease in value of one of these “components” will not cause major loss for all of participants. The investment funds divide into two basic categories: Open-end and closed-end investment funds. In open-end funds participants may join or leave at any time. In contrast, closed-end funds do not allow such fluent participation shifts.
Investment funds may by further divided into numerous types. These are, among others, money market funds, debt securities funds, or stable growth funds. The differences between them are the level of investment security as well as the object of investment.
Our Law Firm provides consulting services concerning mutual investments – we also advise how and what to invest in to gain the maximum benefits.
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