Hi, Moduers!

Before buying a mutual fund, there are two things you need to pay attention to a fund fact sheet and a mutual fund prospectus. The aim is to identify the mutual fund’s composition and background not to make the wrong choice. You can find an easy way to read fund fact sheets here.

The fund fact sheet summarizes the prospectus that focuses on a mutual fund’s content as an investment product. In a mutual fund prospectus, on top of the mutual fund composition, there is also information on regulations, policies, and the fund manager’s backgrounds. Therefore, a prospectus usually contains dozens of pages, whereas a fund fact sheet has only one to two pages long. However, you don’t need to read the entire prospectus cover to cover. Here are some essential points you need to consider when reading a prospectus:

Translation of Eastspring Investments Cash Reserve’s Prospectus

Translation of Eastspring Investments Cash Reserve’s Prospectus*


  1. Fund Manager’s Track Record

Based on the mutual fund prospectus above, the fund manager’s track record can be seen in chapter III, page 15. You can check the fund manager’s track record from the license they have, whether they have obtained a representative fund manager license (WMI) from the Financial Services Authority (OJK) or not. How long has it been, and how was the fund manager’s experience in mutual funds management?

  1. The Custodian Bank

A custodian bank is a bank that represents investors in managing the money invested in mutual funds, so ensure that the custodian bank has a license as a custodian bank in the Capital Market sector and has been registered and supervised by the Financial Services Authority (OJK). You can also see custodian banks’ track record and experience in serving customers in the custodian bank section of the mutual fund prospectus.

  1. Investment Objectives and Policies

It is necessary to know the objectives and investment policies and whether they follow the mutual fund type. The following is a guideline table for reading prospectuses relating to mutual fund investment objectives and policies.

1.Money market fundTo provide stable and liquid returns.100% of money market products are bank deposits, Indonesia Bank Certificates, and/or bonds with less than one-year maturities.
2.Fixed income fundTo obtain optimal performance in the medium term with significant investments in debt securities (bonds) issued in IndonesiaAt least 80% of government or corporate bonds and a maximum of 20% of money market or stock market
3.Equity fundTo obtain attractive portfolio performance in the long term through active management of securities, especially stocks issued in Indonesia.At least 80% on equity (stock), and the rest is bonds or money market.
4.Index fundTo obtain additional investment value that is equivalent to index performance (benchmarks)At least 80% is invested in securities that are part of the index.
5.Balanced fundTo provide optimal returns to investors with several types of asset allocations, such as money markets, bonds, and stocks.Money market, bond, and stock in which the composition of each does not exceed 79%.

Table of Mutual Fund Investment Objectives and Policies Based on Prospectus


Besides the objectives and investment policies for mutual funds based on the table above, it is also necessary to consider sharing investment returns obtained by the mutual fund product concerned. The distribution of the return on mutual fund investments is usually booked back into the mutual fund product to increase the Net Asset Value (NAV). Participation unit holders (investors) who wish to enjoy investment returns can sell back part or all of their participation units.

  1. Methods Used in Calculating Fair Market Value

The method used in calculating fair market value must be following the Decree of the Chairman of BAPEPAM and LK or what is now known as the Financial Services Authority (OJK).

According to BAPEPAM and LK regulations Number IV.C.2 and POJK concerning Mutual Funds in the Form of Collective Investment Contracts contains the following provisions:

  1. The fair market value of securities in a mutual fund portfolio must be calculated and submitted by the fund manager to the custodian bank no later than 5 p.m West Indonesian Time every Bourse Day.
  2. The Net Asset Value calculation of an investment fund must use the securities’ fair market value determined by the investment manager.
  3. Participation units are calculated based on the Net Asset Value (NAV) at the end of the relevant Bourse Day after the mutual fund books are completed. Without considering the increase or decrease in mutual fund assets due to the purchase and/or settlement request received by the custodian bank on the same day.
  4. Requirements and Procedures for Purchase, Redemption, and Switching of Participation Units

There are the minimum and maximum amounts for each transaction type in the requirements and procedures for buying, selling, and switching units. You don’t need to read it one by one because the Moduit team has set it up in the application, so you can only input the nominal unit and Indonesian rupiah according to the prospectus’s provisions.

Those are the ways to read a mutual fund prospectus that you can do.

Salam Moduit!

*) Disclaimer: Prospectus and explanations relating to mutual fund products are for illustration purposes, not for investment recommendations.