5 Things to Pay Attention to In Choosing Mutual Fund Investments

PortalMadura.Com One of the investment instruments that are currently favored by investors is mutual funds. How not, this option is very suitable for long-term investors and or those who are aggressive.

In addition, the risk of this mutual fund was not too high. Meanwhile, for another reason, there are many good features in digital platforms that currently attract millennials to invest in mutual funds.


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But before that, there are a few things you should know in choosing a mutual fund investment. Here are five ways to choose it as reported PortalMadura.Com, Wednesday (24/11/2021) from the page Idntimes.com:

Get to Know Your Risk Profile

Before you open a mutual fund account, you will usually be required to fill out an investor risk profile questionnaire by the investment product provider. There are conservative, moderate, and aggressive risk profiles.

The purpose of identifying this risk profile is to determine your level of tolerance for the risks of the investments you make, because everyone has a different tolerance for risk and goals.

Adjust to Your Investment Goals

The first thing you need to pay attention to in choosing a mutual fund investment is to adjust it to your investment goals. For example, to prepare for retirement, get married, buy a house and so on.

If you are an investor with a moderate risk profile, then you can divide the share of equity mutual funds by 10 percent of your portfolio composition, and the rest is placed in other investments that tend to have lower risks, such as fixed income mutual funds and money market mutual funds.

Choose an Investment Manager Company that is Trusted and Registered with OJK

CEO UOB Asset Management Indonesia, Ari Adil advised mutual fund investors to look for investment manager products and companies registered with the Financial Services Authority (OJK).

“One thing that novice investors need to look at is finding a product that is properly managed by a company registered with the OJK as an investment manager,” said Ari.

These tips are important so that you as an investor avoid fraudulent mutual fund investments. Therefore, you should find out the track record of the MI that will manage your funds. You can check MI’s track record through the OJK website, MI company websites and various news articles.

Find Out Management Strategies and Learn A Lot

In Indonesia, there are various types of mutual fund investments, such as conventional and sharia. Both have differences ranging from systems and principles, agreement processes, investment instruments, management methods, and supervision.

For that, in order not to make a wrong decision, you must be diligent in reading and studying the mutual fund product you want to invest in.

Pay attention to the performance of the mutual fund you choose

How to choose a mutual fund investment that you need to know next is to pay attention to the mutual fund’s rating and performance consistency. Usually several domestic and global companies hold mutual fund ratings, such as Morningstar Rating.

This global rating company gives a 1-5 star rating to products with a minimum age of 3 years that have gone through a calculation process based on Morningstar Risk-Adjusted Return which includes monthly product performance and product performance consistency.

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