Mutual Fund is an investment alternative for investors, especially for small investors and those who have less time and skill to count the risks of their investments. Mutual Fund is designed as tool to gather fund from public that have the capital, will to invest, but only have limited time and knowledge. Beside that, through Mutual Fund, it is expected that the number of local investors in the Indonesia’s Capital Market can increase.

Generally, Mutual Fund is defined as a mean to collect fund from the investment society to be invested in portfolios by the fund manager. This definition is also written in the Capital Market Law No.8/1995 section 1 clause (27) regarding Mutual Fund. There are three points shown on this statement. First, Mutual Fund collects fund from the society. Second, the fund is then invested in the securities portfolio. Third, the fund is managed by an Investment manager.

Therefore, the fund put in the Mutual Fund is investors’ collective fund, and the Investment Manager is the person trusted to manage the fund.

Second, Mutual Fund helps the investor to invest in capital market easier. Determining which good stocks to buy is not easy. It needs specific knowledge and experiences, which some investors don’t have.

Third, time efficiency. Since the fund invested in the Mutual Fund is managed by a professional fund manager, investors do not need to monitor their investment performance all the time.

Like other investments, besides giving the investor the opportunity of profit, Mutual Fund has possibilities of risks. Such as:

From the investment portfolio, mutual fund can be categorized as follow: