I warmly welcome you, dear readers of the blog “skitanie.com”. I chose OFBU . And not by chance. Not long ago I wrote about mutual funds. At first glance it may seem that these are the same thing. That is why I decided to expand on the concept of FSBU, outline the advantages and risks of a deposit, and also analyze how FSBU differs from mutual funds. I think we should start with a definition.
Common funds of bank management are a form of deposit management at the fiduciary level. Funds enter into a trust management agreement with several investors. It is these deposits that form one asset.
Trustees are usually credit institutions that have registered OFBU in accordance with the law.
Object of trust deposit, how to become a participant
You can invest your funds in the following financial assets:
- Cash (foreign currency);
- Securities;
- Precious metals;
- Derivative financial instruments (options, futures).
The most important question that investors may have is: what is the essence of a contribution to OFBU? The essence of investing is that the investor transfers his assets to the fund and receives a “certificate of equity participation.” It is worth noting that this document is not a security. However, it can be re-registered to another person or bequeathed.
Becoming a member of the OFBU is quite easy. Today, many banks provide this service. All you need is to find a fund and enter into a trust agreement. Once the agreement is concluded and the assets are transferred to the fund, the investor is provided with a certificate of participation and the entire amount of assets that he contributed is assessed.
There are many program options that banks offer; almost every investor can choose what he likes. Programs can be divided into two types: risky and conservative . Depending on the choice, the profit will be either impressive or modest. There are also two options for the contribution amount: some funds require only a few thousand to become a participant, others require significantly larger deposits.
Structure of the OFBU financial instrument
CSR
The principles of corporate social responsibility resonate in the hearts of owners of large organizations and industries. Business representatives create their own organizational structures or transfer contributions to existing public associations and funds for the purpose of environmental protection, support of educational and medical programs, improvement of populated areas and holding public events. The IX solemn ceremony of awarding “Leaders of Corporate Philanthropy”, held at the end of November 2016, revealed the most interesting projects and successful implementation of charitable activities in our country.
Risks of investing in OFBU
It's no secret that every investment has certain risks. Be it: investments in cryptocurrency, business, real estate, hedge funds. OFBU is no exception. The main risk for investors who transfer their funds to collective deposits is the management company. It should be remembered that no fund can give you a guarantee of receiving big profits. So you should think it over several times and understand that you can lose everything. These are, of course, not binary options, but the risk is also high.
When investing in OFBU, all responsibility lies with the management company. One wrong action can lead to large losses of assets. It is for this reason that the investments studied in this article are high-risk.
However, the state is trying to minimize risks. There are several laws and regulations that regulate the activities of the FB:
- Banks opening OFBUs are strictly selected;
- Banks undertake to open and maintain a separate balance sheet and account in accordance with FBU. The account tracks all actions with the assets at the bank’s disposal. All transactions in local currency go through the Central Bank, and foreign currency through authorized banks.
- OFBU cannot invest more than 15% of the assets under its management in securities of one issuer, with the exception of government securities.
- The bank that provides OFBU cannot issue loans at the expense of property under its trust management.
Some banks provide the opportunity to invest in OFBU
How is income from OFBU paid?
All profits earned through the activities of the OFBU are divided among investors, taking into account the amount of assets they contributed. The management company maintains a special statement indicating the amount due to each investor.
Funds can be paid in several forms:
- Percentage of the share in the OFBU
Interest is paid to the investor throughout the entire period of validity of the trust management agreement. This is the simplest and most common scenario. For example, the amount of your assets is 200,000 rubles . For a certain period of trust management, the income was 30% . Thus, the amount of your income, let’s say, at the end of the year is 60 thousand rubles . It is worth remembering that the management company’s bonus, which was agreed upon at the stage of signing the contract, will be deducted from this amount. You also need to take into account the fact that the amount of income is not stable. So, next year your profit could be either more or significantly less.
- Income is added to the investor's share
The essence of this form is almost identical to the previous one. However, there is a difference - the investor will not be able to withdraw his income at the end of the year. His percentage of income is added to the initial deposit and becomes an asset. The investor will be able to withdraw his funds only when the contract expires.
- Return of a share of property to the investor
The return is calculated in proportion to the investor’s share of the total pool of assets, taking into account all payments to the management company.
For a more objective picture, it is worth considering this form using an example: the amount of assets in the fund is 2 million rubles . The investor's share is 20% of this amount. Under the contract, the management company owns 2% for services provided, as well as a bonus of 20 thousand rubles. Total: the investor will receive 274 thousand rubles at the time of withdrawal of his share of property from the OFBU.
Top Corporate Philanthropists
- according to general indicators. The company's charitable strategy is distinguished by thoughtful actions and constant development. The company pays special attention to interaction with representatives of the indigenous population of the region.
- JSC United Metallurgical SUEK and PJSC Rostelecom were awarded by the Russian Union of Industrialists and Entrepreneurs for their social investment programs.
- Deloitte JSC was awarded by partners from IBLF for the development of the volunteer movement.
- UC RUSAL were the best, according to GSOM St. Petersburg State University, in the field of educational development.
- The British Council recognized J. T.I. Russia" leader of the year for supporting art and culture
The main differences between OFBU and mutual funds
Bank management mutual funds and mutual funds may seem very similar. Both types of investments have a similar investment mechanism: investors own the assets of the fund, so to speak, they throw funds into a common “pot”. However, despite this, they are strikingly different from each other.
By investing in mutual funds, the investor receives a security in the form of an investment unit. The investor can sell this security. Shares of some funds are sold on the exchange market, so they can be easily purchased. This is the most important advantage of mutual funds.
As for OFBU, the investor receives a “certificate of equity participation.” This document is not a security or property. It only confirms that the investor has entered into an agreement and transferred his funds to the management company.
The main differences between OFBU and mutual funds
They seem to be the same, but if you look closely, they’re not.
The most important difference between OFBU and mutual funds is that when investing in OFBU there is no strict framework at the legislative level regarding the structure of assets. In addition, the contribution to one issuer should not exceed 15% of assets.
This can be attributed to the positive aspects of OFBU, since this fact gives some freedom of action for the management and distribution of assets. On the other hand, this increases the riskiness of this type of investment. It is also worth noting here that all areas and financial instruments that are at the disposal of the OFBU are specified in the declaration. You can familiarize yourself with it when concluding an agreement with the fund.
Another difference between OFBU and mutual funds is that when investing in mutual funds, the investor can only operate with funds in rubles. While OFBU has the opportunity to deposit not only rubles, but also foreign currency, as well as precious metals.
The regulation of both also differs. OFBU is controlled only by the Central Bank. Mutual investment funds are supervised by the Federal Service for Financial Markets. On a quarterly basis, mutual funds submit reports to the Federal Financial Markets Service on the assets in which investors have invested money, and they also need to provide information on how much each asset costs and how their value changes.
But that is not all. Mutual funds are also controlled by an auditor, appraiser, registrar and depository. That is why investors of mutual funds have to pay from their hard-earned money for the services of monitoring their funds. And this undoubtedly reduces their income level. There are no such expenses in OFBU.
Culture and Science
The interests of charitable organizations include not only the life and health of low-income people, but also support for cultural communities and scientific projects:
- The Foundation of Valery Gergiev, director of the Mariinsky Theater, is designed to help talented young artists and groups, and also implements projects and tours of one of the most famous Moscow theaters.
- The Russian Foundation for Basic Research is ready to help young scientists with current projects. This organization was created by Decree of the President of the Russian Federation back in 1992 and now exists as a federal institution. Interestingly, being a completely state body financed from the federal budget of the country, the RFBR accepts donations from individuals and organizations in order to use them in accordance with the charter of the fund. The second distinctive feature of the RFBR is the formation of a council and expert commissions from among active scientists with confirmed academic degrees and recognized experts in their field.
Where to invest your money: in mutual funds or in OFBU?
It is difficult for novice investors to decide on the choice of investing their money. Because there are a lot of different offers on the market. It would be wise for a new investor to first research the best ideas for where to invest money.
What is more profitable - mutual funds or OFBU. Which tool will bring more profit?
Back in 2008, funds could bring investors up to 100% profit per year. Some funds brought in about 500% per annum, and this is quite an impressive capital. However, over time, the market situation has changed, and now the funds do not bring such colossal profits .
At the end of 2022, the leading OFBUs bring their investors about 5-7% per annum. Compared to OFBU, mutual funds brought about 2-3%. But don't rush to the conclusion that bank management funds are much more profitable. Only eight funds brought 5-7% of income. The rest found themselves in an unpleasant situation, suffering losses. In some funds these losses amounted to 15-25%. As for mutual funds, they turned out to be more stable. The maximum loss was about 3%.
What happens to the OFBU if the bank goes bankrupt?
The property of OFBU is not the property of the bank. Therefore, in the event of a bank bankruptcy, the fund's property is not subject to seizure and sale . The bank returns to the founders their funds received from the sale of OFBU assets.
What are the money back guarantees?
According to the legislation of the Russian Federation, including the “Procedure for carrying out securities management activities”, approved by order of the Federal Financial Markets Service of Russia dated April 3, 2007 No. 07-37/pz-n), the bank guarantees you the return of those funds that are in trust management at the time their return. However, the bank cannot guarantee that at the time of return, the amount of funds returned will be equal to or exceed the amount of funds transferred by you to trust management.
Conclusion
Each investment instrument has certain risks and may result in losses. The choice of instrument depends on what kind of return the investor expects and how risk-averse he is. If the investor is risk averse and is not prepared to lose significant money, it may be best to stop and start with the basics. Improve financial literacy in yourself and your children.
However, if an investor is prepared for the possibility of losing a round sum overnight, you can use other investment instruments. It all depends on the experience of the investor and his willingness to risk losing the amount he invests.
Meanwhile, trust management from banks in Russia is not in great demand - the number of OFBU funds is much lower than mutual funds . Accordingly, the volumes of managed assets are several times smaller.
Foundation creation
After reading all the introductory information, you have decided to register the fund. Based on their prescribed structure of governing bodies, you probably already guessed that one person will not be enough to create a fund.
When forming a fund, the founder or founders provide for the future strategy of the fund, its goals, types of activities, form a team and distribute it among the management bodies of the fund.
Based on the decisions made, the fund’s charter is developed and approved, providing for important features that will facilitate the implementation of future fund programs. Distribute the responsibilities of each body and determine the duration of their work.
If there are several founders of the fund, they also determine the procedure for joint activities, form future property for the activities of their fund and set a date for payment of certain property.
It is important to sign all decisions made and send them for state registration to the authorized body of the Ministry of Justice.
You can submit documents to the authorized body of the Ministry of Justice in one of the following ways:
- independently, without notarization of documents
- by notarized power of attorney, having previously certified application P11001 by a notary
- using an electronic digital signature
The fund registration period is 22 working days, which is approximately a little more than a month.
In the authorized body of the Ministry of Justice, documents undergo legal examination at several conditional levels:
- authorized body of the Ministry of Justice - 14 (Fourteen) working days (three weeks) period for reviewing documents. Result - a decision on state registration or a decision to refuse state registration of the fund
- Federal Tax Service 5 (Five) working days - state registration - entering information about the fund into the Unified State Register of Legal Entities
- authorized body of the Ministry of Justice 3 (Three) working days - issuance of documents to the applicant.
As a result of public service from the authorized body of the Ministry of Justice, you will receive:
- charter of the fund with the mark of the tax authority and the authorized body of the Ministry of Justice
- TIN certificate
- certificate of the authorized body of the Ministry of Justice
- record sheet on the creation of the fund
