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Mutual Funds -OPCVM-

Mutual funds are  a collective savings funds drawing on the savings of economic agents by issuing shares and units.

Savings thus collected are used to acquire a securities portfolio managed by an investment management firm, in which one manager, or a team of managers, is in charge of buying or selling securities.

Mutual funds operate through two different entities:

• Portfolio management companies;
• a depository   (a bank usually) which acts as a securities custodian and  receives and executes orders entered by the mutual fund's holders. The financial product is marketed by a promoter or distributor, who may not be one and the same entity;

Mutual funds channel funds into financing companies, contributing thus to the development of the national economy.

Mutual funds can have two different legal statuses: Open-end investment company (SICAV) or Common Fund (FCP).

• The open-end investment company (SICAV) is a public limited corporation whose sole purpose is to manage stock and liquidity portfolios: all investors holding shares in that company are shareholders entitled to have a say on management during general assemblies.
• The Common Fund (FCP) is a joint-holding of securities and liquidities with no legal entity. It is managed by an portfolio management firm acting as representative of unit holders.

Mutual funds  shares and units can be issued and redeemed at any time on holders’ request.

• subscription price is equal to share value plus subscription fees;
• redemption price is equal to share value minus repurchase fees;

Shares and Units may be subscribed to at the current market value. The market value is determined by “Net asset value”. That's the price at which shares or units are sold by the mutual fund, and it is also the price at which shares are redeemed (market value = net assets/ number of  shares and units issued).