Investing in Mutual Funds
Mutual funds pool money from many investors, who
transfer the money to asset management companies. Fund investors
own all of the assets invested in mutual funds.
There are three basic types of mutual funds: open-end, closed-end
and interval. Units of open-end mutual funds are redeemable on
demand. Units of interval mutual funds may be redeemed at dates
specified in its prospectus. Units of closed-end mutual fund are
redeemable at a fund’s termination or at dates defined by the
Investors should usually expect returns that are
higher than bank deposit interest rates, but the returns are not
guaranteed. A large return on short-term investments in the fund is
Neither interest, nor dividends on investments
in a fund are payable under existing regulations. Proceeds are
payable only when units are redeemed.
A “unit” is a nominal, uncertified security, that’s accounted for
by a book entry at a registrar. To purchase a unit from Metropol
Asset Management, an investor should apply for a unit and transfer
money to the company or to the company’s authorized distributor. A
specialized registrar records the number of units owned by each
Units of Metropol AM mutual funds are redeemable on any work day
and may be exchanged for the units of other Metropol AM
When individual investors redeem their units, they must pay 13%
income tax as residents, or 30% as non-residents. Metropol Asset
Management acts as a tax agent and pays the tax on client’s
Moreover, units of the company’s mutual funds are available on the
MICEX Stock Exchange through any broker in the “Unlisted
Securities” section. This is the easiest way to buy the funds’
units, unless a distributor authorized to sell, exchange and redeem
Metropol Asset Management units is available in a client’s city of
In all, investing in open-end mutual funds brings a variety of
• experienced portfolio managers
• liquidity (units are redeemable on any business day)
• diversification (diversified securities are selected to
balance risk and return)
• accessibility (low initial investment minimums)
• government regulation (an advanced system designed to
protect investors’ rights and interests).
Metropol Asset Management offers differing investment
“Metropol Zevs”, an open-end bond mutual
Open-end bond mutual fund “Metropol Zevs” was incepted in December
2003. The fund seeks long-term capital appreciation and asset
preservation. The fund may appeal to conservative investors whose
risk tolerance is below average and who seek returns higher than
bank deposit interest rates. The fund seeks to preserve clients’
assets, minimize investment risks and provide returns that
“Metropol Afina”, open-end hybrid mutual
“Metropol Afina”, an open-end hybrid fund, was incepted in December
2003. The fund’s investment strategy seeks capital appreciation
through a balanced asset allocation in bonds and equity securities
of different classes. The investment strategy targets moderate risk
while providing an adequate return. To this end, Metropol Asset
Management focuses on reducing risks and seeks to earn the same
average return as the stock market.
The fund may appeal to investors looking to reduce the risks
related to investments in equity securities.
“Metropol Zolotoe Runo”, an open-end stock mutual
The open-end stock mutual fund was incepted in
December 2003. “Metropol Zolotoe Runo” seeks capital growth through
investing in income-producing securities. In managing the fund,
Metropol AM investment professionals prioritize providing the
maximum possible return. The fund may appeal to investors
whose risk tolerance is above average and who seek the highest
“Metropol Poseidon – MICEX index”, an open-end index mutual
The fund seeks long term appreciation through
investing in securities which are included in the MICEX index. The
fund managers aim to maintain the asset allocation which replicates
the MICEX index composition.
The MICEX index is a Russian stock market composite index which is
calculated based on the market price of 30 most liquid securities.
The companies included in the index are the most representative of
the Russian market.
The fund seeks to earn the same average return as the stock
Closed-end Real Estate Fund “Metropol
A closed-end real estate mutual fund is an excellent alternative
for investors who seek to allocate their assets in commercial
The real estate market is more stable, predictable and
income-producing compared to the fund industry as a whole.
Moreover, returns on real estate investments far outstrip bank
deposit interest rates.
The current supply of real estate cannot meet
the growing demand for commercial properties, and this offers
unparalleled opportunities for real estate funds and investors who
seek to diversify their assets by investing in the secure and
return-generating financial instruments of closed-end real estate
The Fund’s investment strategy focuses on buying
commercial and industrial properties either to reconstruct and
restructure them or to let the properties in order to add value to
the real estate.
In September 2006, to meet the demand for new investment vehicles
in the sector, “Metropol Olymp”, the closed-end real estate mutual
fund, was launched.