Mutual Fund is an investment vehicle formed by Investment Manager and Custodian Bank, to collect funds from the investors, to be invested into securities portfolio by the Investment Manager.

Investment Manager is a party whose business is managing securities portfolio or managing portfolio investment collective for a group of investors

Custodian Bank is a party that provides securities custody services including receive dividends, interest and other rights, settlement of securities transactions, administration of funds and represents account holders who become its customers.

Investing through Mutual Fund has several advantages as follows:

• Managed by the professional investment team
  Your investment will be managed by professional investment team who have information access, research and more experiences in the capital market.
• Diversified portfolio
  Portfolio diversification will reduce the risk of capital market investment since Mutual Funds are invested in various types of securities so that the risks are also scattered.
• Affordable investment value
  Mutual Fund allows investors to purchase participation units in small investment value, such as IDR 100.000,- (one hundred thousand Indonesia Rupiah).

• High level of liquidity
  The investor can redeem their participation units at any time, so as to facilitate investors to manage their cash. Open-ended Mutual Fund is required to buy back investor’s participation units so that Mutual Fund is very liquid.
• Transparency of information
  Investment Manager must announce its daily Net Asset Value (NAV) per unit in the newspaper and publish its financial statements and prospectus annually so that investors can monitor the progress of their investments on a regular basis.

The risks associated with Mutual Fund investment are as follows:

• Risk of reduction in Net Asset Value (NAV)
  The reduction in NAV is caused by the decrease in the prices of investment instruments in Mutual Fund portfolio. The decline in market prices of investment portfolios can be caused by many things, among them the worsening performance of stock exchanges, the deteriorating performance of issuers, political and economic uncertainties and many other fundamental causes.
• Liquidity risk
  A potential liquidity risk may occur if the investors redeem large amounts of funds at the same time. The term, Investment Manager experienced a rush or withdrawal of funds on a large scale.
• Market risk
  Market risk is a situation where the prices of investment instrument have decreased due to a drastic decline in stock market or bond market performance. Another term is that the market is experiencing a bearish condition. The market risk that occurs indirectly will result in NAV decrease as well.
• Default risk
  Default risk occurs if the issuer of bond instruments owned by Mutual Fund experienced financial difficulties and the issuer is forced not to pay its obligation. Default risk also occurs if the issuer of share instruments owned by Mutual Fund faced bankruptcy. However, these risks could be avoided if the Investment Manager could apply a strict investment policy in choosing the instruments.

There are several types of Mutual Fund as follows:

• Equity Fund
  Equity Fund is a Mutual Fund that invests at least 80% of the portfolio into equity instruments. Equity Fund provides the greatest growth potential for investment value as well as its risk.

• Balanced Fund
  Balanced Fund is a Mutual Fund that invests in equity instruments and debt instruments whose comparisons are not included in the category of Fixed Income Fund or Equity Fund. The potential yield and risk of Balanced Fund can be greater than Fixed Income Fund but smaller than Equity Fund.

• Fixed Income Fund
  Fixed Income Fund is the Mutual Fund that invests at least 80% of the portfolio into debt instruments. Fixed Income Fund provides a higher return than Money Market Fund as well as its risk.

• Money Market Fund
  Money Market Fund is a Mutual Fund that invest up to 100% in money market instruments such as SBI and deposits and/or debt instruments less than one year. Money Market Fund is the Mutual Fund that has the lowest risk but also provides a limited return.

• Index Fund
  Index Fund is a Mutual Fund whose contents are mostly of a particular index (not all, importantly reflect the index) and are managed passively unless there is a new subscription or redemption. If the Fund is traded on the exchange, it is called an Exchange Traded Fund (ETF).

In order to choose the suitable type of Mutual Fund, the investor needs to know his/her investment objectives and risk profile. Herewith we list the type of investment risk profiles as follows:

• Conservative
  This type of investor has a low-risk profile and tends to avoid risk (risk averse). This investor feels comfortable with investment instruments whose yield is not too large but stable. The Mutual Fund that suitable for this type of investor is Money Market Fund, but to maximize investment return, it is better for this type of investor to invest also in Fixed Income Fund that produces a higher yield with relatively low risk in the medium to long-term.
• Moderate
  Investors with moderate risk profiles are readily accepting short-run fluctuations with expected potential profit than time deposits. The choice of Mutual Fund that suitable for the moderate type of investor is Balanced Fund and/or Fixed Income Fund.
• Aggressive
  Investors with aggressive risk profiles are prepared to accept highest investment risks for greatest potential return. The investors of this aggressive risk profile are ready to invest in all financial instruments such as equity funds

The Investor will receive Confirmation Letter of Transaction, delivered directly by Custodian Bank within the maximum period of T+7 after a transaction date.

The investor can monitor their investment units via the Fund Fact Sheet every month issued by Investment Manager. The investor also will receive Monthly Account Statement, delivered directly by Custodian Bank within a maximum period of T+12 after the end of every month.