FAQ on investment

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What is the difference between open, interval and closed pension funds?
Open fund:
1. Returns money on first request of investor
2. Must be diversified, i.e. has to invest in different spheres (deposits, shares, loan securities) within strict limitations of law.
3. The least risk kind of funds, but also the least profitable (outcome for 2007 – on average 50-70% per year)
4. Minimal sum of investment – 100-500 UAH

Interval fund:
1. Returns money of investor occasionally (once a week, month, quarter), but not less than once a year.
2. Must be diversified
3. Risk level of investment in such a fund is less than average, profitability is a bit higher than in open fund (in 2007 — about 60−90%)
4. Minimal sum of investment – 500−1000 UAH

Closed fund:
1. Returns money of investor only after the final term of fund.
2. Can invest up to 100% of assets in shares. It’s profitable (last year some funds gained more than 100%), but very risky.
3. Minimal sum of investment – on average from 5000 UAH
What is unit investment fund (UIF)?
UIF is an institute of mutual (collective) investment, where each investor owns certain share in joint capital. The more certificates are bought by shareholder, the bigger share will be in his possession. The assets of the company are governed by so called company on assets management (AMC). It is this company that aims to provide the maximum profit for investors.
What types of UIFs exist?
There are open, interval and closed UIFs.
Open UIF is an investment fund with securities bought by AMC in any working day.
Interval UIF is an investment fund with securities bought by AMC only in strictly determined periods of time (intervals).
Closed UIF is an investment fund with securities bought by AMC only after its activity is terminated.
What is «diversified fund»?
Diversified fund is a fund that invests assets into great number of financial instruments, distributing risks among issuers and among classes of financial assets. In particularin such a UIF 40% of assets are invested into shares, and 60% — into instruments with fixed profitability (corporate, municipal, state loan securities and deposits). There are not more than 5% of assets of the fund per one issuer.
What’s the point in investment to UIF?
Every investor having bought certificates of UIF becomes a co-owner of assets of the fund. With increasing of cost of assets, the cost of all holding increases too, as well as the price of each certificate. Naturally the difference between the price of purchase of certificate and its current value makes the size of your profit.

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