Collective investment funds, or mutual funds, have been operating in many developed Western countries for over 80 years. Mutual funds were created in order to make investing in securities available and convenient for individuals, who had neither special knowledge about securities trading nor much free time for it. Besides, and this is their main advantage, mutual funds allow small investors to invest their funds in securities on the same conditions as large financial companies do.
A mutual investment fund is a form of collective investment, when individuals and legal entities give their funds to a professional managing company for trust management in order to get profit, while they still remain the owners of their funds. The fund is organized and managed by its managing company under a Federal Securities Commission license to manage assets of mutual funds.

In Russia, first mutual funds appeared in 1996. By that time, there were about 6,000 mutual funds in the U.S., 6,500 mutual funds in Japan, 4,900 in France and about 1,600 in Great Britain. Though their business record in Russia is short, mutual funds proved viable and reliable and were able to gain the trust of many private investors. The process of managing mutual funds is tightly controlled by the Federal Securities Commission, the special depositary and the fund’s auditor. There has not been a single case of the managing company cheating investors or failing to fulfill its obligations to them throughout this whole period.

Currently, as the investment culture is developing in our country and people are becoming more informed of the situation on the stock market, investing in mutual funds is becoming increasingly popular with private investors. However, one should bear in mind that most of the mutual funds are meant for midterm and long-term investment, and therefore one should invest in mutual funds for a period of at least one year in order to get the best yields.