Get to know mutual fund infolists

Before investing in the open-end mutual fund of your choice, you should read the prospectus, or infolist.

It may contain important information that a bank adviser or other intermediary may not provide you with.

Every investment company operating on the Czech market publishes information about open-end mutual funds that it offers. In addition to the name of the fund, its focus and the currency in which the fund is managed, companies also offer other information. However, there is a diametrical difference between them. While on the one hand there are investment companies that offer comprehensive information about funds, on the other hand there are those companies that inform their shareholders only vaguely or hide some information from them in confusing prospectuses.

Undoubtedly, important information in mutual fund infolists is messages that affect your wallet. These are mainly entry, exit and management fees.

Among the shiny premises that inform shareholders properly and sufficiently are funds from the ČP Invest or Conseq family. While the TER unit of cost is not available for the first investment company, it is already available for Consequ.

The TER or total expense ratio indicates how the fund stands against the competition and whether investing in the fund is expensive or cheap.

Benchmark or Measuring Funds

A relatively necessary information is also a comparison of funds or their benchmark. Comparing between mutual funds has the meaning that you know how a particular fund stands in the market and how other funds focusing on the same segment of the capital market are doing. The benchmark concerns in particular the return and a comparison of the individual investment instruments in which the fund invests. This also applies to the underlying assets that the fund manages.

He is not an infolist like an infolist

If you know your fund’s infolist but want to invest in other funds of other investment companies, you don’t have to win. It is true that what the fund, the other disclosure of information. Not to mention the location of individual items or their other names in the prospectus.

Disclosure of fund information is thus fully directed by investment companies. They, like banks in their tariffs, do not have to have completely pure intentions and can try to make it as difficult as possible for clients to get an overview of individual funds. Although it is illogical, it happens that investors are intoxicated by information about the fund’s past performance, which does not have a detrimental effect on future returns, but the investor does not learn about the fee structure.

Solution on behalf of Key Investor Information (KID)

Key Investor Information (KID) is to some extent a solution for retail fund investors. Shareholders will find all information about a specific fund on one or two A4 pages. Needless to say, this is a European Union directive. The aim of this regulation is for the consumer to obtain all the necessary data for his further decision-making.

A good idea is that all infolists will have standardized items and in the same order. They will only change information about specific funds.

Key investor information will come into force as early as this summer. They will get into the practice of domestic funds from July 2012 at the latest. Until then, a transitional period applies.