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
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
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
-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
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.