Mutual Funds In Mexico

Mutual Funds in Mexico
Mutual funds are basically a way for medium and small investors to take part in the stock exchange which is in Mexico the BMV. The reason why these are funds are good forsmall and medium investors is that it normally doesn’t require a minimum investment and if so the minimum investment is much lower than creating his or her own portfolio. On the other hand, besides givingthe possibility to invest in securities with little money it also gives the investor a much higher diversification.
Those two aspects of diversification and a lower initial investment are howeverin my opinion interrelated. Also if there was no minimum investment required to take part in the stock exchange, meaning opening an account with a brokerage house, it is definitely of advantage to havemore money available to spread the risk through diversification rather than just buying securities of just one or few institutions.
Furthermore mutual funds give the investors with little time orlittle knowledge the possibility to let their money work for them. Since there are managers that manage the mutual funds for the investors the responsibility lies with them and the investor can pursuehis own responsibilities at home or at work. However this doesn´t mean that the investor doesn’t know what he is investing in. Mutual funds always have clear investment targets and the risks andopportunities are clearly defined by the manager. From these investment targets, meaning that the target are for example emerging markets, there is basically no deviation possibility and the investor canalways be sure that his investments only go in securities of companies in emerging markets if we continue this example and not in securities of other companies for example in the United States.
Ifan investor in Mexico is interested in buying shares of a mutual fund he has three possibilities of intermediaries to go to in order to acquire these. These intermediaries are Brokerage Firms, Banks...