Think of it as a big pot of money in which you can also contribute. You will receive a share certificate for that contribution. The fund manager will then invest this money – depending on which pot you have put money in – this money in shares, bonds or others.
What is an investment fund?
So you don’t have to invest the time to find out where you would invest the money.
The fund manager ensures a nice spread by not investing the money in one type of share or bond, but for example in at least 30 values. In this way the risk of interest and capital loss is drastically reduced.
Type of investment fund
The funds can be classified according to the assets in which you invest:
- Mixed funds (bonds and shares)
- Real Estate Funds
- Capital guarantee funds
- Cash funds (term accounts and short-term debt)
At a higher level, the funds can also be classified according to a distribution and capitalization fund. With a capitalization fund, the interest and dividends are reinvested. This compared to a distribution fund in which the dividends are paid on the basis of shares.
Is your capital guaranteed in an investment fund?
You may lose all your money because most of them do not offer a capital guarantee. This is especially true when investing in shares. It does exist, but then you must effectively opt for a capital guarantee fund.
There are also funds that can guarantee that you will get back at least your own capital or a percentage thereof.
Connection arranged so?
The big advantage is that you can enter a mutual fund with a limited amount. So you can already start with 100 euros although certain funds require at least 1000 euros entry capital.
Another advantage is that you can easily withdraw from an investment fund such as with beveks and sicavs. If you opt for a closed fund, you can only sell the units.
What does a fund yield?
That is of course always the nice question, although it must be post in mind that there are always costs involved (stock exchange taxes, taxes, entry fees, etc.). It is true that bond funds yield slightly less, but these offer more guarantee on capital protection (not 100%)! If you opt for equity funds, you can generate a lot of revenue, but this is the lowest form of capital protection.
This is how we come to the conclusion that the following investment fund:
- a bond fund has a return of 3.5% to 4% gross,
- a mixed fund has a return of approximately 5% to 7% gross,
- and an equity fund has a return of around 8% to 10%