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Mutual Funds

WHAT IS UIF

In UIF, returns on assets are distributed between investors (unitholders) proportionally to the number of units owned by each investor.

Unit investment fund is a standalone asset complex, which includes assets placed in trust by a trustor (trustors) under the condition of uniting those assets with assets of other trustors, and assets generated as a result of trust management; and where co-ownership interest is certified by a security issued by a management company.

Unit investment fund is not a legal entity.

Assets in unit investment fund are shared ownership assets of unitholders. Partition of assets in unit investment fund and allotments are not allowed.

Value of investment units may fluctuate up and down. Previous yields do not determine future yields. The state does not guarantee return on investments in unit investment funds or information that you should carefully read the Terms before purchasing an investment unit.

CLOSED-END UIFs

Closed-end unit investment fund (CEUIF) is an advanced and rapidly developing financial tool designed for project organizers, which are interested in attracting long-term investments to ensure successful implementation of their project.

Unlike open-end unit investment funds, CEUIF is established to follow a certain investment strategy. Investor can only realize his units upon termination of the fund. Investment period ranges between 1 and 15 years.

Taxation

The Russian laws define UIF as a non-corporate asset complex. This means that UIF as a whole does not have to pay income tax. Unitholders have to pay tax on income from realized investment units.

Unitholders pay personal income tax (companies pay profit tax) on the income received from investing in UIF. A unitholder’s income is a difference between income from realizing investment units and costs of purchasing them. For residents and non-residents of the Russian Federation, personal income tax rate amounts to 13% and 30%, respectively.

Acting as a tax agent, Management Company levies a tax on the income from realizing investment units by an individual unitholder.

Companies pay taxes by themselves under the current tax rates.

Invested assets

Asset classes invested into closed-end unit investment fund include monetary funds or other assets specified in the investment policy statement.

Management control

CEUIF unitholders are entitled to active participation in fund management. Unitholders meet to discuss important issues related to fund operation. Mandatory annual audit is yet another way of monitoring fund performance.

Access to information

Investment units are intended for purchase by qualified investors. Investment unit circulation is restricted under the federal laws and follows the rules of circulation of securities for qualified investors.

According to the Federal Law on Investment Funds, information on unit investment fund with restricted circulation of investment units is only provided to unitholders or other qualified investors.