Basic terms

What is a mutual fund?

Mutual fund is a collective scheme for investing and managing money in the financial markets. The investor provides a certain amount by buying units of the fund, and the portfolio manager of the fund invests cash in various financial instruments. Each of the investors owns a part of the fund in proportion to the amount invested by him. At the request of the unit-holders of open-end

The fund is not a legal entity. Its activities, including the management of its assets, are carried out by an Asset Management Company, which is licensed and controlled by the Financial Supervision Commission. The Asset Management Company is a legal entity that has a team of professionals and acts in the interest of all unit-holders in the fund.

Advantages of the mutual fund

  • A team of professionals manages your money in order to generate an income.
  • Mutual Funds invest in a large number of financial instruments in various areas of the economy and geographical regions, which lead to risk optimization.
  • The income from investments in mutual funds is exempt from tax in accordance with Bulgarian legislation.
  • The purchased units are direct your property which allows you to achieve your long-term goals.
  • In open-end funds, at any time you can receive a specific equivalent of the рurchased units through the so-called redemption of units from the fund.
  • The information for the value of the units of the mutual funds managed by members of BAAMC is daily published in, as well as on the website of each asset management company. So, every day you know how much your money has become.

Types of mutual funds

The mutual funds are classified according to market risk (risk of the respective asset) as follows:

  • Equity fund
  • Mixed fund
  • Bond fund
  • Money market fund

The funds are classified according to geographical risk (currency risk) as follows:

  • On the respective country
  • Euro area countries
  • Europe (including the euro area)
  • North America
  • Asia and the Pacific
  • Other regions
  • Global (partially or fully investing outside the above regions and / or investing in several separate regions)

Investors should keep in mind that the value of the units and the income from them may decrease, profits are not guaranteed, there is a risk for investors not to recover the full invested amount. Investments in units are not guaranteed by a guarantee fund or otherwise. The future results of the funds are not necessarily related to the results of the previous periods.

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