About mutual funds
Invest in mutual funds with HSBC WorldTrader. Mutual funds allow you to create a diverse portfolio by investing in securities, bonds, currencies and commodities across markets.
Your money is pooled with money from other investors and put into a range of assets. These assets will depend on the fund’s objectives and investment approach.
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Why invest in mutual funds?
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Things to know
Creating a portfolio from a variety of asset classes can help increase your wealth potential. Diversification is important because different assets respond differently to different market conditions. So having a range of investment types may lower your risk by strengthening your portfolio against volatility.
Mutual funds regulatory changes from 1 April 2024
The UAE Securities and Commodities authority (SCA) issued a new regulation that is effective from 01 April 2024. Here is a summary of the key points:
- Promotion of foreign mutual funds is limited to Private placement for Professional Investors with a minimum ticket size (as guided by SCA)
- Public Offering is permitted for Retail Investors only with locally domiciled funds.
A Professional Investor (PI) is a customer who:
- Has net assets of at least AED 4 million
- Appears to have sufficient experience and understanding in the field of investment, the relevant financial markets and any associated risks
- Has confirmed their PI classification status.
A retail investor is a customer who:
- Does not meet the criteria of a Professional Investor, or
- Fulfils PI conditions but opts-in to be a Retail client
To find out more about the regulatory changes, please read our mutual funds FAQs (PDF 154KB).
Are mutual funds right for you?
Investing in funds is not for everyone. For example, mutual funds may not be suitable if you:
- Want potentially higher returns, but aren't prepared for variable returns which include the risk of losing some or all of the money you invested.
- Don't understand how returns are calculated, the factors and scenarios that can affect returns, or the fund's objective, strategy or approach.
- Don't understand the risks associated with the fund. Some funds use financial derivatives to hedge risks or improve performance. You should be aware of their risks, including the chance of defaults.
- Don't want to have your money tied up for long periods of time. As mutual funds are exposed to market ups and downs, you need to stay invested long enough to ride out the downturns. For this reason, you should have enough financial resources to make sure you don't have to sell your funds when the market drops.
- Need to convert your investments to cash in the short-term to meet specific needs. This isn't possible with all funds.
- Aren't familiar with the fund manager and the fund's track record.
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