What is a fund?

A fund is an investment product that allows a large number of people to pool their money together in order to invest in a range of different securities such as shares and bonds.

When you buy shares or units of a fund, you’re buying an ownership stake in a range of investments that are managed by a fund manager.
The fund manager combines your money with that of other investors and uses the money to buy and sell investments, with the goal of increasing the value of the fund.

The investments held in a fund are called the fund‘s assets or fund’s holdings, and all of a fund‘s holdings together are its portfolio.

The fund manager invests the fund‘s assets, typically by buying shares, bonds, or a combination of the two. Some funds buy more complicated securities such
as property and commodities and almost all funds have a ‘buffer’ of a cash allocation.

The price for a share in a fund is calculated by taking the total value
of the securities owned by the fund and dividing that number by the number of fund shares outstanding. So if a fund has €1 million in assets, and there are
one million shares outstanding, each share would cost €1. This per-share value is called the net asset value (NAV).

When you invest in a fund, you are getting exposure to every investment within that fund. Let’s take an equity fund as an example.

Imagine three of the top 10 holdings are Apple making
up 3% of the fund, GlaxoSmithKline at
4% and British Telecom at 5%. Currently
the fund is exposed to 75 different company shares.

If you chose to invest in this fund say on 17th February 2016, a €1,000 investment would mean that you owned a €30 stake in Apple (meaning 3% of the €1,000),
€40 stake in GlaxoSmithKline (or 4% of the €1,000) and a €50 stake in British Telecom (meaning 5% of the €1,000). You would also have owned smaller stakes in 72 other
companies, since the fund owned shares in 75 companies as of 17th February 2016.

Investing in this fund would allow you to diversify your portfolio for investments over a broad range of shares, which is desirable since you should avoid putting
“all your eggs in one basket” and instead spread risk across 75 different investments. As a result of this your investment does not depend too heavily on the fortunes of just
a few individual companies.

Funds differ on the basis of their investment strategies and investment holdings. Some funds focus on buying and holding shares in companies for example in the
U.K. or the U.S. or the Eurozone or Asia while others offer a global perspective. Other funds may focus solely on bonds issued by companies or governments or both.
Again, they may be spread geographically or according to industry. A fund‘s investment strategy will affect its risk profile and performance. There are funds which
invest in both shares and bonds.

The Benefits of Fund Investing

Funds offer certain benefits to investors:

1. They Require a Small Initial Investment

If you have small amounts to invest it would be difficult for you to assemble a varied, diversified investment portfolio on your own. This becomes possible when investing in a

2. They’re Easy to Trade

Funds can be purchased in a number of ways, namely through a Mediterranean Bank Branch or with the assistance of a financial advisor at Charts Investment Management Service or
you could opt for  purchasing funds online via the ewealth platform offered by  Mediterranean Bank. This makes funds relatively accessible and easy to buy.

Unlike many other security types, such as individual shares or bonds, you don’t need to find a buyer when you wish to redeem the investment. Instead, the vast majority of
funds offer daily redemptions, meaning that the fund company will give you cash whenever you are ready to sell.

3. They’re Regulated

Fund managers are regulated by the regulatory authorities. But the fact that funds are regulated does not mean they cannot lose value. The value of a fund can
go down as well as up and past performance is no guarantee of future returns. If the underlying holdings lose value, so will the fund. Therefore, even if the risk may
be low, it is always recommended that the investment is seen with a medium to long-term perspective to reduce exposure to short-term market volatility.

4. They’re Professionally Managed

If you plan to buy individual shares or bonds, you will probably want to do in-depth research to ensure you’re making a good investment. That may involve reading a company’s
cash-flow statement or assessing the company’s debt obligations. Such in-depth financial knowledge is not required to invest in a fund. While fund investors should
have a basic understanding of markets and carry out some research to assess its suitability before buying into a fund, in the end, there is much less investment research

When investing in a fund, you are injecting money in the fund and then the fund manager will select individual securities on your behalf. Fund managers
conduct the investment research for you and you can take advantage of the fund manager’s knowledge of investments.

Not all funds deliver their aim however, some funds carry expensive fees and others can perform poorly. But overall, funds are good investments for those
who don’t have the time, or interest necessary to compile a collection of securities on their own.

At Mediterranean Bank we offer our flagship product – the
Model Portfolios of funds,
each comprising different proportions of asset classes. The funds are carefully selected and recommended by us together with Morningstar, a world-renowned investments
research company. Model Portfolios are
presented in five different variations, and will provide a diversified investment portfolio that is intended to maximise returns while lowering risk over the medium to long term.

This article has been sourced from the article Guide to Your Financial Education, found on our international partner, Morningstar website, as a guide to provide
readers with useful information to improve their knowledge of investments, though it does not constitute and should not be treated as investment advice.



X’inhuwa il-fund?

X’inhu sewwasew fund? fund hu prodott ta’ investiment li jiġbor fih il-flus ta’ diversi nies biex jinvestu f’għażla ta’ prodotti ta’ investiment differenti
bħal ishma u bonds.

Meta tixtri l-ishma minn fund, tkun qed tixtri ownership stake (jiġifieri parti) f’għażla ta’ investimenti mmaniġġjati minn fund manager. Dan
il-manager jikkombina l-flus tiegħek ma’ ta’ investituri oħra u jużahom biex jixtri jew ibigħ investimenti, bl-għan li jkabbar il-valur tal-fund.

L-investimenti miżmuma f’fund jissejħu assi jew fund holdings u dawn kollha flimkien jiffurmaw portafoll. . Normalment, il-fund manager jinvesti
l-assi billi jixtri ishma, bonds, jew kombinazzjoni tat-tnejn. Xi funds jixtru prodotti aktar kumplikati, bħall- propjetà u l-kommoditajiet waqt li l-funds
kollha kważi għandhom ‘buffer’ jew allokazzjoni ta’ flus kontanti (cash).

Il-prezz għal sehem f’fund jiġi kkalkulat billi jittieħed il-valur totali tal-assi tal-fund u dan in-numru jiġi dividut bin-numru ta’ ishma fil-fund.
Jiġifieri, jekk fund ikollu miljun ewro f’assi, u jkun hemm miljun sehem outstanding, kull sehem ikun jiswa ewro. Dan il-valur għal kull sehem jissejjaħ
il-valur nett tal-assi (in-‘Net Asset Value’ jew NAV).

Meta ninvestu f’fund niġu esposti għal kull investiment f’dak il-fund. Bħala eżempju nistgħu nsemmu equity fund.

Ejja nimmaġinaw eżempju fejn tlieta mill-10 assi ewlenin huma ishma f’Apple bi 3% tal-fund, il- GlaxoSmithKline b’4% u l-British Telecom b’5%, u li bħalissa l-fund hu espost għal ishma f’75 kumpaniji differenti.

Jekk, ngħidu aħna, fis-17 ta’ Frar 2016 tagħżel li tinvesti elf ewro f’dan il-fund, ikun ifisser li jkollok €30 sehem fil-kumpanija Apple (jiġifieri 3% tal-€1,000), €40
sehem fi GlaxoSmithKline (jew 4% tal-€1,000) u €50 sehem f’British Telecom (jiġifieri 5% tal-€1,000). Tkun ukoll is-sid ta’ investimenti iżgħar fi 72 kumpanija oħra peress li,
fis-17 ta’ Frar 2016, il-fund kellu l-ishma tiegħu f’75 kumpaniji differenti.

Meta tinvesti f’dan il-fund tkun qed tiddiversifika f’firxa wiesgħa ta’ ishma. Din hi ħaġa tajba għax b’hekk tevita li tinvesti kollox f’post wieħed u minflok tifrex
ir-riskju tiegħek f’75 investiment differenti. Is-sogru jkun mifrux u għalhekk l-investiment tiegħek ma jkunx jiddependi kollu kemm hu fuq il-prestazzjoni ta’ ftit kumpaniji

Il-funds huma differenti minn xulxin abbażi tal-istrateġiji tal-investiment tagħhom u tal-assi tal-investiment. Xi funds jiffukaw fuq ix-xiri u ż-żamma ta’ ishma
f’kumpaniji, pereżempju fl-Ingilterra u l-Amerka jew fiz-zona ewro jew fl-Asja, filwaqt li oħrajn joffru perspettiva aktar globali. Funds oħra jistgħu jiffukaw biss fuq
bonds maħruġa minn kumpaniji jew mill-gvern, jew mit-tnejn. Għal darb’oħra, dawn jistgħu jkunu mifruxa ġeografikament jew skont l-industrija. L-istrateġija ta’ investiment
ta’ kull fund taffettwa l-profil tar-riskju u l-prestazzjoni tal-fund. Hemm funds li jinvestu kemm f’ishma u kemm f’bonds.

Il-benefiċċji tal-investimenti fi fund

Il-funds joffru benefiċċji importanti għall-investituri:

1. Jeħtieġu biss ammont inizjali żgħir ta’ investiment

Jekk għandek ammont żgħir x’tinvesti, ikunlek diffiċli li waħdek tifforma portafoll ta’ investiment varjat u diversifikat. Bix-xiri ta’ fund tkun tista’ tagħmel dan.

2. Faċli biex tinnegozjahom

Sew jekk qed tixtri l-funds waħdek mill-online trading platform tal-Mditerranean Bank  u sew jekk izzur wahda mil fergħat tal-Mediterrnean Bank biex jagħmillek
dan, ix-xiri tal-funds hu faċli ħafna. Meta tkun għamilt it-tranżazzjoni finanzjarja, ħafna drabi kulma tkun trid tagħmel hu li ċċempel jew tuża l-internet banking,
servizz bħal dak offrut minn Mediterranean Bank, biex tixtri jew tbigħ l-ishma f’fund.

Bil-kontra ta’ ħafna tipi oħra ta’ titoli jew assi, bħal ishma individwali, m’għandekx bżonn issib xerrej meta tkun trid tbigħ l-investiment. Il-maġġoranza tal-funds
joffru proċess li bih tieħu flusek lura, u dan ifisser li l-kumpanija tal-fund tagħtik il-flus meta tkun lest tbigħ.

3. Huma regolati

Il-fund managers huma regolati mill-awtoritajiet regolatorji. Imma minkejja dan ma jfissirx li ma tistax titlef il-valur oriġinali tal-investiment tiegħek f’dawn
il-funds. Il-valur ta’ fund jista’ jitla’ jew jinżel u l-passat mhux garanzija tal-futur. Jekk l-assi jitilfu l-valur, l-istess jiġrilu l-fund.
Għalhekk, anke jekk ir-riskju jkun baxx, dejjem hu rakkomandat li l-investiment isir fuq medda ta’ żmien medju jew fit-tul biex tonqos il-possibbiltà li jintilef il-valur
tal-istess investiment.

4. Huma mmaniġġjati b’mod professjonali

Jekk tippjana li tixtri stocks jew ishma individwali, aktarx tkun trid tagħmel
riċerka estensiva biex tassigura li qed tagħmel investiment tajjeb. Din tista’ tinvolvi analiżi tar-rendikonti tal-cash-flows tal-kumpanija jew l-evalwazzjoni tad-djun
tal-kumpanija. Dan l-għarfien finanzjarju estensiv mhux meħtieġ għal investiment f’fund. Għalkemm l-investituri ta’ fund mitluba jkunu jafu tagħrif bażiku
fuq is-swieq u jagħmlu r-riċerka tagħhom qabel jinvestu f’fund ħalli jevalwaw hux tajjeb għalihom, fl-aħħar mill-aħħar m’hemmx bżonn ta’ ħafna riċerka fuq l-investiment.

Meta tinvesti f’fund tkun qed tpoġġi flusek fih, imbagħad il-fund manager jagħżel sigurtajiet individwali f’ismek. Dan jagħmillek ir-riċerka fuq l-investiment u
b’hekk tkun qed tgawdi mill-għarfien speċjalizzat tiegħu.

Mhux il-funds kollha jilħqu l-għan tagħhom, xi funds jista’ jkollhom ukoll tariffi għoljin, filwaqt li oħrajn jista’ jkollhom prestazzjoni fqira.
Imma kollox ma’ kollox, il-funds huma investiment tajjeb għal dawk li m’għandhomx il-flus, il-ħin jew l-interess meħtieġ biex waħedhom jiffurmaw ġabra mdaqqsa u
varjata ta’ investimenti.

Aħna ta’ Mediterranean Bank noffru l-prodott, li llum sar sinonimu magħna – i
l- Model Portfolios li huma
ġabra ta’ funds, li kull wieħed għandu proporzjonijiet differenti fi klassijiet ta’ assi varjati. Il-funds huma magħżula b’reqqa u rakkomandati minna flimkien
ma’ Morningstar, kumpanija ndipendenti u rinomata mad-dinja għar-riċerka fuq l-investimenti. Il-
Model Portfolios huma ppreżentati
f’ħames varjażjonijiet differenti u jipprovdu portafoll ta’ investiment diversifikat li għandu l-għan li jżid id-dħul filwaqt li jbaxxi r-riskju fuq perjodu medju u

It-tagħrif li imsemmi hawn fuq ġej mingħand l-imsieħeb internazzjonali tagħna, Morningstar u mis-sit elettroniku tagħhom. Fit-taqsima Guide to Your
Financial Education
tingħata gwida b’informazzjoni utli kif inżidu l-għarfien tagħna dwar l-investimenti, għalkemm dan ma jikkostitwixxix u mghandhux jiġi
ttrattat bħala parir dwar l-investimenti.

Teaching your children the value of money

The fact that nowadays most of our children see us pay for food, clothes and toys by means of a card or a cheque and withdrawing money from an ATM, may give them the false impression that money is very easy to get your hands on. Helping your child to understand and respect money from an early age will help them manage it better in adulthood.

Once children understand the importance of money they can make wise decisions relating to financial matters in their future life. Appreciating the value of money and how to save it, make it grow, and most importantly how to spend it wisely will definitely help them to achieve more in life.

A very simple way to teach your children the value of one’s earnings is to involve them in the management of the day to day expenses. First of all it is important for them to understand where the money came from and what it is used for. Explain that in order to earn money one must work hard.

When for example you are about to purchase something for the house or planning a holiday, explain that there is a budget or a limit of how much money can be spent. Involve them if possible and let them know how to plan in order to save up the money you need to enjoy life. Explain if possible the principle of income and expenses. The child needs to understand the concept and value that one needs to work hard to earn money before this is spent.

As children become more familiar with money they’ll start to understand how it is used on a daily basis. This includes the many different ways people can pay for things. The most important message to convey to children about spending is “when it’s gone, it’s gone!”

Explain to your children that saving money may be critical to help you manage difficult times or allow you to plan for major life events such as education, purchase of a car or property or even the birth of a child. Placing a portion of their pocket-money into a piggy bank would also help your children start saving. Parents may grant pocket-money when children help them around with household chores, thus associating earning money with work. After giving them pocket-money let them have the experience of choosing how to use it. As children get older the most important thing is that they learn the concept of “save, spend, save again”.

Encourage teenage children to plan a budget for something they might want to buy. By looking at all the costs in advance, they’ll find they can make their money go a lot further. Once children learn basic budgeting through direct experience, it’s there for life. As your child becomes more independent, it’s good for them to hear other peoples’ experiences.

Just like adults do, children should also learn how to make a proper investment out of the saved money. We can always guide them on what to buy with the money they have saved. You can start by opening a bank account in their name or you might wish to initiate and gradually build an investment portfolio for them, along with your own funds. This will make them feel that the saved money has been invested in the right manner.

Carrying out the above mentioned activities will help you teaching them the importance of money. It is important for your child to learn positive financial habits. Although the motivation needs to come from within your child, a little guidance and clear expectations will go a long way toward getting them into the habit. More importantly your child’s attitude about personal finance takes cues from your own, so re-examine your own approach to money, if it seems like the lesson isn’t getting through, for what you do always speaks louder than what you say.



Ngħallmu l-valur tal-flus lil uliedna

It-tfal illum qed jarawna aktar inħallsu l-ikel, il-ħwejjeġ u l-ġugarelli bil-credit card jew b’ċekk. Jarawna wkoll niġbdu l-flus minn ATM. Dan jista’ jagħtihom l-impressjoni li l-flus faċli tiksibhom. Li ngħinu t-tfal tagħna jifhmu u jibżgħu għall-flus sa minn età żgħira hu importanti ħalli meta jikbru jkunu jafu jimmaniġġjaw flushom aħjar. Dan hu ta’ ġid għall-futur tagħhom għax jekk jifhmu u jagħrfu din l-importanza jkunu jistgħu jieħdu deċiżjonijiet finanzjarji għaqlin aktar ’il quddiem f’ħajjithom.

B’hekk jitgħallmu japprezzaw il-valur tal-flus u kif iffaddluhom, kif iżidu l-valur tagħhom, u – l-aktar ħaġa importanti – kif jonfquhom b’mod għaqli.

Se nsemmi issa ftit metodi li nistgħu nużaw biex nispjegaw u ngħinu lit-tfal jifhmu aħjar il-valur tal-flus.

Mod sempliċi hu li ninvolvu lil uliedna fl-immaniġġjar tal-ispejjeż ta’ kuljum. Qabelxejn, importanti nfehmuhom minn fejn jiġu l-flus u għaliex jintużaw. Tajjeb nispjegawlhom li dawn ma jaqgħux mis-sema imma trid taħdem ħafna għalilhom.

Meta, ngħidu aħna, tkun qed tippjana li tixtri xi ħaġa għad-dar jew għal xi vaganza, spjegalhom li hemm baġit jew limitu ta’ flus li tista’ tonfoq. Jekk ikun possibbli involvihom u għidilhom kif qed tippjana li tfaddal il-flus għal dan. Spjegalhom li, biex tkun tista’ tħallas xi ħaġa, ridt taħdem għal numru ta’ ġranet biex taqla’ l-flus.

Meta t-tfal isiru aktar midħla tal-flus, jibdew japprezzaw aktar kif nużawhom ta’ kuljum. Jibdew jifhmu wkoll il-modi differenti li nistgħu nużaw biex inħallsu. L-aktar messaġġ importanti li rridu nwasslulhom hu dwar it-tberbiq tal-flus, jiġifieri li “meta nonfqu l-flus, ma jerġgħux jiġu lura”.

Spjegalhom kemm hu importanti li nfaddlu għax dan jgħinna f’mumenti diffiċli. Li t-tfal ifaddlu xi ħaġa mill-pocket money fil-karus tagħhom jgħinhom biex huma wkoll jibdew ifaddlu. Il-ġenituri jistgħu jagħtu xi ħaġa tal-flus lil uliedhom meta jgħinuhom fix-xogħol tad-dar u b’hekk uliedna jibdew jassoċjaw il-flus max-xogħol. Wara li tagħtihom xi ħaġa tal-flus ħallihom jiddeċiedu huma kif se jużawhom – imbagħad jagħmlu dak li jkunu ddeċidew. L-aktar kunċett importanti li għandna nwasslu lil uliedna hu dak ta’ “faddal, onfoq, erġa’ ibda faddal”.

Meta uliedna jibdew jitfarfru u jidħlu fl-adolexxenza tajjeb li nħajruhom jibdew jippjanaw baġit għal xi ħaġa li jridu. Jekk jaraw l-ispejjeż kollha minn qabel, jintebħu li jistgħu jużaw flushom aħjar. Jekk it-tfal jitgħallmu l-affarijiet bażiċi, relatati mal-immaniġġjar tal-flus, bl-esperjenza diretta, dawn jibqgħu magħhom tul ħajjithom kollha. Meta ulienda jibdew isiru aktar indipendenti, ikun tajjeb ukoll għalihom li jisimgħu l-esperjenzi ta’ ħaddieħor.

U bħalma jagħmlu l-kbar, it-tfal iridu jitgħallmu wkoll kif jagħmlu investiment tajjeb bil-flus imfaddlin li jkollhom. Dwar dan, nistgħu niggwidawhom fuq x’jistgħu jagħmlu bil-flus li jkunu faddlu. Ngħidu aħna, tista’ tinvestilhom flushom billi tiftħilhom kont bankarju f’isimhom, jew billi tibda tibnilhom portafoll ta’ investiment, bi flushom u bi ftit flus oħra minn tiegħek. Dan jgħinhom iħossu li l-flus li qed ifaddlu qed jiġu investiti bl-aħjar mod.

Dan kollu li semmejna jgħin lil uliedna jitgħallmu fuq l-importanza tal-flus. Tajjeb li t-tfal, miċ-ċokon, ikollhom drawwiet finanzjarji pożittivi. Għalkemm il-motivazzjoni trid tiġi mit-tfal stess, xi ftit ta’ gwida u aspettazzjonijiet ċari jgħinuhom ħafna biex irawmu fihom dawn id-drawwiet. It-tfal jixorbu l-attitudnijiet tal-kbar, u l-attitudni ta’ wliedna fuq il-finanzi hi riflessjoni tal-attitudni tagħna.

Għalhekk, tajjeb li minn żmien għal żmien neżaminaw ir-relazzjoni tagħna mal-flus. Għal uliedna dak li nagħmlu jħalli impatt ferm akbar minn dak li ngħidu.


We strive to ensure a streamlined account opening process, via a structured and clear set of requirements and personalised assistance during the initial communication stages. If you are interested in opening a corporate account with MeDirect, please complete an Account Opening Information Questionnaire and send it to corporate@medirect.com.mt.

For a comprehensive list of documentation required to open a corporate account please contact us by email at corporate@medirect.com.mt or by phone on (+356) 2557 4444.