Patrimony without legal personality constituted by the contributions of multiple investors. The management company that administers and represents the fund is in charge of investing these contributions in different assets and financial instruments, whose evolution in the markets determines the results, positive or negative, obtained by the investors or participants. The minimum investment unit is the share. The securities in which the fund invests are guarded by a depositary company -usually a credit institution-, which also exercises a certain vigilance of the manager before the participants. There are different types, depending on the asset in which they invest: fixed income, variable income or mixed. Within fixed-income funds, money market funds or FIAMMs invest in short-term money market assets (bills of up to 18 months). On the other hand, mutual funds can invest in both equities and fixed income, with no limit on the maturity period.
Origin: Bank of Spain