The risk distribution principle: This principle allows investment funds to distribute the risk at an extent not achievable by individuals by their own means.
Professional management: By nature, securities markets are technical markets requiring knowledge at a certain level, and developments in them must be closely monitored. Professionals monitor the movements in those markets, interpret the meaning of those movements, and perform the necessary trading transactions (i.e. buy or sell).
Operating a securities portfolio: Although investment funds can invest in various assets subject to certain limitations, their basic purpose is to buy and sell assets and to earn income from spreads between such buy and sell transactions and from profit shares and interest incurring for the securities they hold.
Fiduciary property: All investment funds are based on the principle of fiduciary property. The principle of fiduciary property is that the creator of the fund is the owner of that fund on a fiduciary status. Savers give the creator of the fund the power to perform trading transactions for the fund. The said power is given under a fund bylaw. The creator of the fund is obliged to manage or cause to manage the fund under the said bylaw and by protecting the savers’ rights.
Protection of assets: Although an investment fund does not have a legal person status, its assets are separate from its creator. Furthermore, the Capital Market Law orders that the assets in an investment fund may neither be pledged, nor be used as a guarantee, nor be attached in favor of third parties. In other words, the assets in an investment fund are protected by law.