General Information

The mutual funds were first established in Great Britain during the 1860s. They are based on the management of the money of many individual investors. People invest their savings in a mutual fund which, through its professional managers, purchases bonds, stocks, etc. for them, so the investments can provide higher income to the investors than if they participated on the Stock Exchange on their own. 

Around the world and in our country, the mutual funds exist in two main forms – corporate and contractual. The corporate form,  which is called as well an open-end investment company is a shareholder company, whose scope of activity is investment in bonds, of funds collected through publicly offered units, acting on the principle of risk distribution. The contractual form, which is called as well a mutual fund is not a legal entity, but rather a specified property, the purpose of which is collective investment in bonds, of funds collected through publicly offered units, which is executed on the principle of risk distribution by the managing company. Another feature of the mutual funds is that their units are subject to Redemption on the grounds of the net value of their assets upon submitted request from their owners.

But, despite having different form, their content is the same, and that’s why from now on we’ll call them with their general name – Mutual Funds. However, for the investors it is more important to know that the Mutual Funds differ in their investment strategy. Investors invest money in the Mutual Fund by purchasing its units. After receiving money this way the Mutual Fund purchases different securities (bonds, stocks) and other financial instruments on the Stock Exchange and the OTC market, as the income from them, under the form of interest, dividends and capital profits forms the profit of the fund. Part of it is used to cover the expenses of the mutual fund, which is minimum and everything that remains is considered as profit for those participating in the corresponding fund. 

Types of Mutual Funds

According to the investment strategy which they follow, the mutual funds are classified in four main groups:

• Conservative - investing in long-term securities (bonds) and instruments on the financial market
• Low risk - investing in long-term securities (bonds) and small proportion in stocks
• Balanced - investing in stocks and bonds at the same time
• Aggressive - investing mainly in stocks

Advantages of the Mutual Funds

• Opportunity for higher profitability compared to the traditional products, such as bank deposits
• Professional management of the invested funds
• Daily access to the investments and the yield accrued up to the moment
• Yield, free from taxes
• Monitoring and control on the activities of the management company by the Financial Supervision Commission

Some risks associated with Mutual Funds

• The value of units and the investment income may decrease
• Profit is not guaranteed
• Investors may not recover the full amount invested
• Investments in UCITS are not guaranteed by a guarantee fund established by the State or any other warranty
• Future results are not related to the results of previous periods

Managing Company

The asset management companies are shareholder companies, which:

• Manage the activities of the mutual funds regarding investments in securities and other financial instruments of funds, collected through publicly offered stocks/units.
• Assess the mutual funds profiles and specify the net value of their assets, by calculating the issue price and the Redemption value of the stocks/units of the fund.
• They keep the records, maintain and store the accountability of the mutual funds, and also execute all obligations, which occur for the mutual funds in this relation.

The asset management company of DV Mutual Funds is DV Asset Management.

As of 30.09.2024 DV Asset Management manages and consults the management of financial assets amounting to more than BGN 6,660 billion.