Saving holders may evaluate their savings by issuing securities from issuer companies, brokerage houses or securities exchanges. However, investing in securities requires knowledge and expertise. In addition, since individual savings generally do not reach sufficient size, the portfolios created by them are also risky portfolios. This risk may be the subject of capital or it may be a matter of bringing in the portfolio. For this reason, mutual funds and investment trusts, which are called collective investment institutions in the capital market, have been established.
A collective investment enterprise is called an investment fund when it is established as a separate and independent legal entity according to legal structures and a mutual fund when it is established by another legal entity within a contractual framework. Although they are similar to each other in terms of purpose and economic function, mutual funds and investment trusts are separated from each other in terms of their working style and service provided by investors.
This booklet explains the fundamentals of mutual fund investment, how the mutual fund works, what factors to consider before investing, and how to avoid potential hazards.
The exchange traded fund may be obtained by obtaining the fund participation certificate by bringing together the securities and cash in the portfolio in such a way that the document of participation is traded on the stock exchange markets and reflects the composition of the fund portfolio of the authorized participants participating directly in the fund creation process, Is the property established for the purpose of returning the participation certificates to the custodian and receiving the portion of the funds in the fund for the purpose of managing the portfolio according to the principle of dissipation and the principle of faithful ownership.
Stock exchange mutual funds shall consist of a portfolio of at least 80% of its portfolio, which consist of securities within the scope of an index deemed appropriate by the Board and which is based on the formula in the annex to this Communiqué, The Index shall be established as an Index Fund to follow the index based on a correlation coefficient of at least 90%.
Exchange traded funds, in the frame mentioned in the first paragraph,
A) Through full copying from the whole,
B) By sampling from a selected portion,
Funds that invest at least 25% of the portfolio value of the portfolio in the securities of partnerships established in Turkey including the State Economic Enterprises, which are included in the scope of privatization according to the legislation, on a monthly weighted average basis.
Documents to participate in exchange traded funds, including those not of type A, are in the form of securities.
Participation documents are traded on stock exchanges.
Allows the investor to change the shares in the fund in the direction of the request for fund participation certificate
Creation and withdrawal of the fund participation certificate are not based on cash but on the basis of "same" exchange.
The net asset value is expected to be at least discounted or premiumed.
Continuous disclosure of portfolio contents and net asset value, etc. There are obligations to illuminate the sky.
Authorized participants have different functions in the creation and redemption of fund shares.
Minimum Transaction Unit: The minimum amount of stock exchange fund participation certificate required for the creation and redemption of stock exchange participation certificates,
Establishment of a new fundraising document: The process of establishing a new fundraising document as much as the minimum trading unit amount or multiples by bringing together securities and cash in the portfolio to the custodian body, in order to reflect the composition of the fund portfolio by the authorized participant,
Authorized Participant: Intermediary institutions and banks that have an active role in the creation of exchange traded funds and in the redemption process, who have signed a contract with the founder and deemed appropriate by the Board,
Withdrawal of the fund participation certificates: At least one minimum transaction unit shall be created by the authorized participant, delivered with the custodian penny, and the corresponding securities and cash withdrawal period corresponding to the said participation certificates.
The primary market transactions of exchange traded funds consist of transactions between the authorized participants and the custodian establishing new fund participation certificates and taking back the fund participation certificates in the same way.
Following the process of establishing the fund-raising certificate, the newly created fund-raising certificates obtained through the authorized participants constitute the secondary market transactions of the fund which is traded on the stock exchange.
Creation Process of New Fund Participation DocumentsIf the number of participation certificates in circulation is to be increased, the authorized participant putting together the securities and cash in the fund portfolio, reflecting the composition of the fund portfolio, not exceeding the determined fund amount, shall submit this portfolio to the custodian body to bring together the minimum transaction unit amount and As many new funding documents. At the time of clearing, securities and cash-custody institutions transmit new funding documents to the authorized participant.
Detailed guidelines for establishing a new funding instrument are included in contracts signed between the authorized participant and the founder.
Reinstatement of Fund Participation DocumentsThe authorized participant who wishes to dispose of all or part of the fund participation certificates shall form at least one minimum transaction unit and shall deliver such participation certificates to the depository institution. At the time of clearing, the authorized participant receives securities and cash in the amount of his portfolio in exchange for the participation certificates he has given.
A contract is signed between the founding participant or the participants and the founder to perform the withdrawal of the funding documents and to establish new funding documents, and the mentioned authorized participants are indicated on the explanatory note.
Minimum Trading UnitAuthorized participants perform the creation and withdrawal of funds participation documents in blocks forming the minimum transaction unit. The amount of the minimum trading unit shall be determined by the founder, with the appropriate opinion of the Board and the custodian, and shall be included in the fund's internal regulations.
Price and Value of Participation DocumentsEach fund participation document has two separate values, net asset value and transaction price.
Net asset value; Refers to the amount held by deducting debts by adding receivables to the total value of the securities portfolio and / or other assets invested in the fund, which are included on the behalf of the owners of the participation certificates. As a result of dividing the net asset value into the number of existing participation certificates, the net asset value per share is found.
The transaction price is the final price of the transaction on the trading day.
The calculation of the net asset value is declared in the form of the liability of the builder and disclosed in the fund prospectus as it is deemed appropriate by the Exchange.
Limitations Regarding Fund Portfolio : In the management of exchange mutual funds, it is necessary to comply with the portfolio limits stated for index funds in Article 42 of the Communiqué on Principles of Mutual Funds.
Other Transactions the Funds may make : Exchange traded funds may carry out the transactions of subparagraphs (b) and (d) of Article 43 of the Communiqué on Principles Regarding Mutual Funds.
Portfolio Valuation Principles : Assets included in the portfolios of exchange traded funds; Are valued as explained in the explanatory note as to be consistent with the calculation method of the securities index which is included in the base index.
Necessary documents for the fund institution: In the Fund foundation, the following information and documents together with the information and documents listed in Article 16 of the Communiqué Serial: VII, No: 10 on Principles Regarding Mutual Funds published in the Official Gazette dated 19/12/1996 and numbered 22852 Is required:
A) the authorized participant;
The partnership structure as of the date of application,
The latest financial statements, which are independently audited,
Information about the authorities,
B) Information on the availability of adequate space, technical equipment and organization required to be an authorized participant and that personnel's duties and responsibilities have been determined,
C) Information on the underlying index,
D) Information on the minimum transaction amount.
It is compulsory to include the following in the Fund Regulations, together with the particulars contained in Article 17 of the Communiqué on Principles Regarding Mutual Funds.
A) Title and address of the authorized participant,
B) the minimum transaction unit,
C) The principles for the creation and re-acquisition of new funding certificates,
D) Principles for the purchase and sale of fund participation certificates on the stock exchange.
Fund internal rule standard is determined by the Board.
Application for Registration of Participation Documents: In addition to the documents listed in Article 23 of the Communiqué on Principles of Mutual Funds, in addition to a petition, the founder must apply to the Board together with the contracts signed with the authorized participants.
Formation of Fund Portfolio, Advance Bonding and Initial Public Offering: Fund portfolio;
A) Advance to the Fund by the Founder at least as much as the minimum fund amount specified in Article 20 of the Communiqué on Principles Regarding the Mutual Funds,
And / or
B) Realization of a periodical public offering outside the Exchange as much as the said amount.
The duration of public offering can not be more than 2 business days and less than 30 business days. The public offering period may be extended by obtaining appropriate opinion from the Board.
In the event that the builder assigns an advance to the fund, the fund portfolio with such advance shall be established by the founder within three days at the latest according to the provisions of the bylaws.
In both cases, it is imperative that the funds mentioned in the first paragraph be paid before the fund starts to trade on the Exchange.
Trading on the Stock Exchange : The participation documents registered by the Board as a result of applications made to the Board for the registration of the stock exchange fund participation certificates shall be processed in the relevant market of the ISE as per the ISE regulations in case the applicant applies to the Borsa.
Intermediary Contracting : In the first public offering of exchange traded funds, the Board is required to comply with the arrangements for brokerage activities and intermediary institutions in relation to the sale of the public participation certificates through public offering and the commitment of the entire unsold portion of the shares to be purchased in full and in cash It is obligatory to sign the contract of brokering contract.
The intermediary undertaking can only be undertaken by the founder or by a consortium of founder-authorized participants.
