Understand Stock Differences With Mutual Funds, Offer Different Returns And Risks

Shares and share mutual funds (Freepik)

YOGYAKARTA - Shares and mutual funds are two different investment instruments, but many people still think the same. Even though they both play in the capital market, both have some differences that investors must understand. So what are the differences between stocks and stock mutual funds that you need to know when you are going to invest?

The choice of investment instruments is very important and needs careful consideration in order to comply with financial goals. Currently, stocks and mutual funds are in great demand by investors, both new players and experienced investors. Both offer different returns and risks so they must also be adjusted to the financial condition of investors.

When investing in mutual funds, your capital will be managed by a professional management company or investment manager to allocate your investment. Meanwhile, when investing in stocks, you as an investor must manage your own funds. In addition, let alone the difference between stocks and stock mutual funds?

Investment is a very important financial activity in preparing finances in the future. However, the risk in investment also requires you not to buy instruments carelessly or rashly. For those of you who are still confused by the difference between shares and share mutual funds, here is the explanation.

One of the striking differences between stocks and stock mutual funds is in terms of fund management. As mentioned earlier, the capital of funds in stock investment is fully managed by investors or traders themselves. So investors only get reports through fund fact sheet and return investment.

Meanwhile, mutual funds are a form of investment that is considered more practical because the funds are managed by investment managers. So investors don't need to manage funds and just wait for reports and investment profits.

Stock investment has a higher risk than mutual funds. This is of course an important consideration for novice investors. In stock investment, there is a risk of lowering the value of shares and liquidation of issuers.

Meanwhile, in stock mutual funds, there is a risk of a decrease in the value of the net asset (NAB) of ownership units. Because the investment capital is managed by an expert in the financial or investment sector, the risk is lower.

Profits or returns on stock investments are obtained from capital gains, namely the difference in selling price and share purchase price and dividend gain. Meanwhile, in mutual funds, profits are obtained from increasing the value of ownership units. Stock investment is known to provide greater returns than stock mutual funds.

In stock investment, there is a final tax burden, which is 0.1 percent of the value of stock sales. In addition, investors also have an obligation to pay a final tax of 10 percent if you get a company dividend.

Meanwhile, in the mutual fund, there is no tax borne by investors. However, you still have to report the mutual fund profits to the annual SPT report. In addition, investors will also be subject to a fee for withdrawing funds every time they make investment money because the investment money is regulated by the management asset company.

The process of disbursing funds in stocks and stock mutual funds also has differences. In stock investment, you will receive proceeds from the sale to the investor's fund account (RDI) on T+2 or two days after the transaction date. Meanwhile, in the stock mutual fund, the disbursement process is longer and longer because it involves investment managers.

The process of buying in stock investment can be done directly by investors. Investors only need to buy assets through exchanges/third parties and a few moments later they have received ownership of assets. Meanwhile, the purchase of stock mutual funds must go through a longer process. After you buy mutual funds to APERD, it will then be linked to the investment manager and the custodian bank to store your assets.

Such is the review of the difference in stocks and mutual funds that must be understood by investors before investing. You should choose investment instruments that are in accordance with financial goals and financial conditions because stocks and mutual funds offer different returns and risks.

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