What You Need To Know About Investment Funds

Do you want to invest in a company indirectly by purchasing 
shares collectively as a group? An investment fund is a form of group investment 
which makes it possible for your money to consolidate with those of other 
investors and later invested on your behalf by an experienced fund manager.

There are various types of investments funds that can help 
you in accumulating wealth. Each type of investment fund has its benefits and 
risks, but its success will depend on the objective of your investment.

There are various 
types of investment funds that are available on the market today as listed 
below:

-Cash funds

-Equity funds

-Bond funds

-Currency funds

They make it easier for people to make wise investment 
decisions without wasting time. They are used by new investors who do not have 
the confidence to risk their money by investing directly in a company.

The working Mechanism of Investment  Funds

An investment fund 
obtains money from small investors and later converts them into specific investments 
which make it possible for an investment firm to access more securities. 
Individual investors are not bound by the high cost of trading because the 
company makes them enjoy economies of scale in their operations.

For you to mitigate the risk, you need to have a completely 
diversified portfolio that is made up of several funds that are combined. If you 
are bold enough, you can choose to invest in equity funds that have high risk 
and expect good returns in future. However, you need to invest in cash and bond 
funds that are known to have lower risk as compared to the other type of 
investment.

Most of these funds require you have a minimum investment of 
1000. But you can also save 50 on a monthly basis per fund.

The profit made by your fund attracts a Capital Gains Tax 
when it is transferred or sold. However, 
you will be entitled to a free tax allowance each year, which stands at 11280 
for the year 2012/2013 taxation year.

Benefits of Investment Funds

There are various benefits that investors can enjoy from the 
various investment funds available as discussed below:

-Investments funds have various risk levels, and this gives 
investors more options for investment

-They help investors to exploit different markets since they 
cover all geographical locations around the globe.

-They help you to generate more revenue or offer 
opportunities for growth

-It allows you to choose a fund which corresponds to your 
investment goals.

-Experienced fund managers work on your behalf to make sure 
that the goals of the fund are realized

-Investors can enjoy tax exemptions for specific types of 
investments

Important features of Investment funds

– It is a collective form of investment

– There are various types of investment funds to 
suit various investment objectives

– There are several experienced fund managers who 
work tirelessly to ensure that the goals of the fund are achieved.

Remember that the rules of taxation will soon change and 
that investing in ISA will depend on your circumstances. 

The value of your investment will either appreciate or 
depreciate, and you can get good returns or not.