Mutual funds

A mutual funds, FCI (Acronym) or mutual fund is an investment alternative which is to raise funds from various investors, natural or juridical, to invest in different financial instruments; responsibility is delegated to a Management Company which may be a bank or financial institution.

The FCI or mutual funds are diversified investment alternatives, and investing in many instruments, reducing the risk.

A mutual fund is a capital represented by the contributions of various people, called participants in the fund, managed by a management company responsible for its management and administration, and by a depository institution that guards the securities and cash and acts as security and surveillance before investment.

By investing in a fund gets a number of shares, which daily have a price or net asset value, obtained by the division between the heritage value and number of shares outstanding.

The fund's performance becomes effective at the time of sale of the shares, which may take place at the time desired.
The savings through banks, credit unions, or checkbooks teachers but help maintain the real value of your money offer relatively low interest rates. In the search for higher yields, you can choose to invest in directly in stock exchange, debt, etc.

For those; who find it difficult to invest directly in shares of publicly traded companies or to diversify the investment in debt or foreign currency, there are alternative mutual funds like index funds. Also always worth starting with the most elemental, with the basics, and speculation that can make a lot, but you can also lose a lot.

Mutual funds are a mechanism for savings. It is a society organized by a group of investors who seek an end common investment companies there are many types: those who invest in debt or fixed income or investing in company stock is equity. There are plenty of funds to suit the needs of each investor, and banks now offer great facilities for investment in these mechanisms.

The fact that investment companies are "group of people," helps reduce the amount of money necessary to invest. Normally you can go from $ 10,000 pesos, and some banks from $ 1,000.00. Mutual funds are an alternative for everyone.

Index funds

Both quoted investment funds such as index funds have the possibility overcome the limitations established by law for conventional equity funds in terms of investment in securities issued by one entity, which is limited to 5 per 100’s heritage fund.

For them, the limit of investment in securities of one entity can reach is extended to be up to 35 per 100 of total fund assets.

This expansion on the margins of maneuver that managers have is what allows the replication of the benchmark. The index funds are what are known as passive management, i-e that replicate the composition of the indicator as a reference without the managers making decisions about values or overweight or underweight sectors. This form of management ensures that the fund get identical performance to the index that follows.

Therefore, exchange traded investment funds have a certain resemblance to index funds, As both try to replicate a particular stock index or basket of securities, but there is a fundamental difference between them, since ETFs can be traded (bought and sold) several times throughout the session trading while the index funds only operates at market close, as with other investment funds.

The listed investment funds are most recently in the stock market has long existed in other financial markets. The first fund was established in the U.S. contributed to the early nineties and ten years later, in 2000, starting the first exchange-traded funds in European markets. Today there are about five hundred mutual funds traded, negotiated in thirty and three different stock markets that move around 450,000 million dollars worldwide .