Mutual funds are a kind of joint investment, where a lot of people unite their funds in order to invest them into securities. In the Bulgarian legislation they exist as open-ended investment companies and mutual funds. By buying shares of a mutual fund, you declare your interest to participate in a common investment portfolio, managed by a professional team of experts of the management company. The created portfolio of securities answers to preliminary defined investment objectives and strategy described in details in the Prospectus and/or in the Rules of the mutual fund. The portfolio managers of the management company invest the raised capital, and the achieved profit or loss are distributed proportionally to all investors in the fund.

Why is it profitable to invest in mutual funds

• Professional management of the invested funds by high qualified financial analysts and portfolio managers, whose daily work is directed to achieve best results for the investors
• Investing in a diversified portfolio of securities as the purpose is to reduce to minimum the systematic risk related to investing in assets with similar profile
• High liquidity of the investment, because mutual funds are obliged to redeem its shares in case the investors want to sell them
• Economies of scale through reduction of the transaction costs
• High level of investment transparency – according to the Bulgarian legislation mutual funds are obliged to keep accountancy for the accumulated and disbursed funds, and their activity is being monitored by the Financial Supervision Commission
• Taxation – physical and legal persons do not pay taxes for the income, realized from deals with mutual funds’ shares, concluded on the regulated Bulgarian securities market, including when the shares are redeemed at a desk of the mutual fund

Notice to the investors