The number of investment alternatives is growing day by day in Turkey as all over the world. Identifying the best investment alternative that most optimally addresses the needs of individual investors, post-investment monitoring of economic developments on a daily basis and switching to different instruments when the need arises, and keeping track of maturity dates of the portfolio securities and the preemption rights on equities primarily demand both time and knowledge. The mutual funds which are managed by professional managers therefore offer the best instrument, releasing the investor from the burden of performing the aforesaid functions.

Mutual funds derive their earnings from the profits on buying/selling the securities in their portfolios, and from dividends and interest revenues. Furthermore, a rise in the market price of portfolio securities elevates the overall portfolio value, resulting in a rise in the unit value of the shares.

All mutual funds carry a certain level of risk depending on the type and weight of the securities in the portfolio. The value of the fund may rise or fall depending on the market dynamics and price movements. It should be remembered that the higher the potential return is, the higher the risk will be. When choosing a mutual fund, the investor should acquaint himself with the management strategy of the mutual fund in which he/she considers investing, and examine whether the risk involved is compatible with his/her investment preferences and the degree of risk he/she wills to accept.

Our T-Bill/G-Bond mutual funds mainly invest in medium- or long-term government bonds and in treasury bills with a view to generating a higher return in a term of 6-months to 1-year than the bills and bonds with similar terms. The daily values represent the daily variations in the market prices of bills and bonds in the fund, and these may well be negative. However, as one should not daily monitor the price of bills or bonds one directly purchased, keeping track of the Bill & Bonds Mutual Funds on a daily basis may lead to false assessments. Please note that our fund managers adjust and control the term structure of the fund according to market dynamics.

Bills & Bonds Mutual Funds contain multiple treasury bonds and government bonds to disperse risk and to provide a diversified portfolio. Moreover, the return on the mutual fund may, depending on the performance of the portfolio manager, potentially exceed that of the bills or bonds you may have purchased.

Mutual funds purchased at the right time on the correct insight can make you money. Any investment in a mutual fund should be consistent with one’s expectations. As you know, Type A funds are required to carry at least 25% equity in their portfolios, i.e. they are impacted by upward and downward movements in the stock exchange prices pro rata the equities in their composition. Therefore, when investing particularly in Type A mutual funds be sure to consult with your customer representative to communicate your market expectations so that (s)he may direct you to the correct fund that best suits your risk preference. Remember that fund managers adjust the composition of equities in the fund (subject to the inherent limits of the fund concerned) according to market dynamics.

The Balanced Mutual Fund is composed of equities in the range of 25% to 55% depending on the market conditions. Therefore, the Balanced Mutual Fund follows the rising prices pro rata the equities it contains. On the other hand, remember that the fund will aim to protect you from a plunge in the stock prices by virtue of the proportion of equities contained in the fund and with the fund manager’s efforts.

Our Bills & Bonds Mutual Funds invest mainly in medium- and long-term treasury bills and government bonds. The aim is to provide investors with higher gains than bills and bonds with comparable terms, with an average term of 6 months for the Bills & Bonds Mutual Funds, or with an average term of 1 year for the Long-Term Bills and Bonds Mutual Fund. Consequently, the fund carries the same level of risk as that of the bills and bonds with comparable term structures. However, the risk is dispersed, i.e. lower, as multiple bills and bonds are contained in the fund.

There can be no guarantee of a particular level of return as mutual funds invest in capital market instruments which generate varying levels of earnings depending on the market dynamics. Furthermore, the historical performance of a mutual fund is no guarantee that a same level of return may be expected in the future also. Market conditions and prices are the primary determinants of the returns on a fund. Professional portfolio managers strive to protect our customers from market fluctuations while taking any potential opportunities.

Mutual funds are independent as an entity from their incorporators, and hence are free from the risks of their individual incorporators. The investors’ share certificates in a mutual fund are kept at the Central Registry Agency (MKK), and the securities contained in a fund’s portfolio at the Settlement and Custody Bank.