Differences between mutual funds and closed-end funds mutual funds (also called open-end funds “referred to) and closed-end funds differ in many ways. The knowledge of the criteria is for investors crucial to find the right type of investment. Mutual funds have the ability to record an unlimited number of investors. Accordingly funds can be collected unlimited, invested typically in different systems. Due to this relatively large portfolios, a corresponding dispersion is achieved, which can reduce the overall risk.
The Fund purchase via a deposit from a broker, a bank or directly from the fund company. The minimum investment in a mutual fund is usually 50 euros for savings plans and 500 euro for one time systems. Add issue premiums by up to 5% come, inasmuch as no fund brokers claim is taken. Shares of mutual funds are also very fungible and can usually average daily volume sold or returned be. This guarantee does not exist however. In the recent past in particular investors of different open real estate funds learned that additional closures are possible if a return run enters and there is not enough liquidity.
Open-ended funds by investment law are legally regulated and subject to the control of the BFin. Special tax benefits do not exist regularly, the tax income from capital assets as a type of income are taken into account. In closed-end funds, the Fund volume is limited, accordingly only so long new investors can be recorded until the planned equity was collected. Investments are typically in one or a few objects, according to the scattering is tends to be rather low. However, the thing-oriented investment objects have often only a low correlation to other investment products and thus achieve attractive diversification effects relative to the overall portfolio of the investor. Unlike open-end funds, closed-end funds are entrepreneurial investments. Entering a participation of a broker or a bank is typically routed through the drawing of consents. The minimum investment amounts of a closed turnout usually between 10,000 and 20,000 euros plus an Agios amounting to 5%. Fund discount stores enable but often also the drawing without subscription fee. Closed-end funds are comparatively little fungible. Investors should realize that it is a long-term investment. Although a secondary market emerged in the recent past, a guarantee for a sell and price of closed-end funds before the end of term does not exist however. Legally closed-end funds have moved long in the grey market, where there were only a few laws. This will however change soon, because the Federal Government is preparing an amendment to the legal grounds and control of closed-end funds and investors wants to ensure a higher degree of security and transparency. The general tax advantage by closed-end funds, which could make investors high initial losses tax claims and could charge the tax with other positive income was abolished late 2005. Now, there are only specific tax benefits, for example, ship or foreign real estate funds. Income from renting and leasing or business are also tax to be used.