The expert spoke about the disadvantages of closed-end mutual funds

Closed-end mutual funds (PPIFs) remain one of the most controversial investment tools. Despite their potential profitability, experts warn of a number of significant drawbacks that may deter investors. Olga Veretennikova, vice president of the Borsell analytical company, told Izvestia on March 15.

Mutual funds, like other mutual funds, pool investors' funds to invest in various assets.: stocks, bonds, real estate, etc. However, unlike open mutual funds, where shares can be bought or redeemed on any business day, closed-end funds assume the purchase of shares only at the time of the formation of the fund. This makes them less flexible and accessible to a wide range of investors.

One of the main disadvantages of mutual funds is their long-term nature. The terms of operation of such funds usually range from 3 to 15 years, and early repayment of shares is possible only in exceptional cases. For example, if an investor does not agree with the decision of the general meeting of shareholders to change the strategy or management company. However, even such an opportunity should be prescribed in advance in the rules of the fund.

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Another problem is the low liquidity of the units. Unlike exchange-traded funds, where units can be quickly sold on the market, in mutual funds, the investor will have to independently look for a buyer if the fund's rules allow such an opportunity. This can lead to difficulties in selling shares at an affordable price.

In addition, PIFs assume a high entry threshold. The minimum amount for investing in such funds often starts from 100 thousand rubles, and many management companies set a minimum contribution of several million rubles. This makes mutual funds inaccessible to most private investors.

The expert also noted that mutual funds are high-risk instruments. They often invest in less liquid and more volatile assets, which can bring both high returns and significant losses. For this reason, most mutual funds are available only to qualified investors who have sufficient experience and understanding of risks.

"Investors should carefully assess their financial capabilities and willingness to make long—term investments before considering mutual funds as part of their investment portfolio," Veretennikova summed up.

The information in the material is not an investment recommendation.

Earlier, on January 18, Evgeny Statov, a partner at Capital Lab, told Izvestia about current investment instruments. According to him, in conditions of high interest rates, deposits remain one of the most attractive tools for saving capital. The level of deposit rates in the largest banks reaches 23%, which allows you to earn a stable income with minimal risks.