Open Mixed Funds

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An open mixed fund distributes investors’ money across different types of investment. For example, he invests their assets by simultaneously combining shares in companies, i.e. stocks, and loans to companies, i.e. bonds. In this way, the risks of the various investment options are spread. In return, as an investor, you will receive shares or shares in the mixed fund. You can sell your mixed fund shares again at any time. This means that the money is quickly available.


Possible goals: When could an open mixed fund be useful for me?         

The value of the open-ended mixed fund follows the value of the investments it contains, for example stocks and bonds as well as the dividends and interest paid for them.

Risks: What are the dangers of investing in an open mixed fund?           

Loss of value: You have no guarantee of how the performance of an open-ended mixed fund will actually go. Because if the value of the mixed fund’s investments falls – for example because the market slips or because companies are in economic difficulties – this is inevitably also reflected in the value of the fund’s share.

Use: What can I get from investing in open-ended mixed funds?

The diversified investment of your money via an open mixed fund in various forms of investment such as stocks and bonds reduces your risk if a single asset should fail – for example, if a single company becomes insolvent. This is because your fund had only invested part of the money you brought in in this company, while the other part is distributed through investments in many other companies. If these other companies continue to pay dividends and interest, they will continue to participate in them through the fund. This happens either because the fund distributes it to you, or because it invests it again and thus increases its value. Another way of spreading risk is for a mixed fund not to invest exclusively in the bond or equity market.

The broad diversification across several asset classes is decisive for whether a mixed fund is suitable for you as an investment in the long term. Therefore, before deciding on a fund, you should consider its investment strategy.

What obligations and costs do I have to face when buying an open mixed fund?         

Costs: An open mixed fund costs money. When you buy fund units, there is usually a so-called front-end load. When the units are returned to the fund company, a redemption fee is sometimes charged. In addition, various costs are continuously paid from the fund’s assets.

Fees: With some banks you also have to pay custody fees annually for keeping your fund units in a custody account. You have no further obligations.

Can I return or sell the fund unit at any time?

If you want to sell your fund shares again, you have two options. On the one hand, you can usually return most of the fund shares in open-ended mixed funds to the fund company every trading day, i.e. sell them back. The fund company will then pay you the value of the units, deducting a redemption fee if necessary. However, the investment conditions may provide that the redemption of units is suspended in certain cases. On the other hand, you can also resell your share to other investors. This is usually done via the stock exchange at the price stated there. But then you have to factor in sales costs that reduce your return.

What information does the provider have to provide me with? 

Anyone who wants to offer an open mutual mixed fund can prepare a sales prospectus. This contains all economic and legal details on the relevant fund as well as the key investor information, which summarizes the information in the sales prospectus. In addition, the provider is legally obliged to report semi-annually and annually on the development of open-ended mixed funds. For example, if you seek advice from a bank on the mixed fund, they must provide you with all of this information. For this purpose, it must hand you the key investor information, in which all information is presented briefly and concisely. In addition, a record of the advice from the bank must then be drawn up and handed over to you.

Where can I buy open mixed funds?          

Open-ended mixed funds can either be purchased directly from the manager of the fund or the fund company or from other financial distributors who offer such funds. This can be banks, savings banks or other financial services institutions.

You should pay attention to the possibly different prices and the additional costs, especially the amount of the so-called front-end load. If you have received advice, you must be given the key investor information in addition to a record of this advice. The sales prospectus and the most recently published annual and semi-annual reports must also be made available to you free of charge. In the case of certain mixed funds, however, this only applies if you expressly request these documents.

Who are open mixed funds suitable for?   

Open mixed funds are aimed at investors who invest money once or regularly as part of a savings plan and do not want to worry about the composition of their investment. You can usually reduce the risk of a loss through the broad diversification of the investment.

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