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Posts Tagged ‘Investment Funds’

How does a mutual fund?
Its operation is very simple. When we invest in a mutual fund you are buying a certain number of units. You can have 1 entry (very rare), 58, 503; 4731, or even 76.4 units. By that I mean you can have decimals without problems.

With the money invested in a mutual fund holders are in fact being a small part of the portfolio that is the bottom. The same portfolio, identical (shares, securities, bonds, various companies) becomes ours but in part, precisely the part that we invest in all assets of the fund (remember that money is only a small part within the fund, taking into account the other clients).

We know what a mutual fund and how it works in general. In the next post will try to see what types of mutual funds are today.

Me’s biting flies lately mutual funds so I started a series devoted to the topic. My intention is to learn as I share with you all the ideas and conclusions that I will arrive. Try in the coming posts, to see what is basically a mutual fund, how it works, what types of investment funds is, what advantages and disadvantages do usually offer, and so on.

Today we have to talk about what are the investment funds . So, to the point.

What are mutual funds?
It is a way to save it is to collect money from many people interested in making an investment and put that money together through an investment fund manager (which takes its relevant committees.) That money is invested in a portfolio of “assets”, ie various forms of investment: stocks, shares, bonds, fixed income, monetary assets (money), etc.

When a person invests in a fund, you are actually buying part of it (called “units”). Each entry has a value. For example if we invest in a mutual fund whose “interests” are valued at the time of purchase at $ 10 and we want to invest is 1000 euros, we will become holders of 100 shares of the fund.

The price of each share is called “net asset value fund.”

This type of investment at least ensures the conservation of all the capital at a future date. Some also ensure a certain profit.

Before entering into a guaranteed investment fund look essentially the following:
Conditions for the effectiveness of the guarantee: Under what conditions capital guarantee is effective. Often times the guaranteed investment fund ensures the capital only if certain conditions are met.

Liquidity constraints: Many mutual funds offer guaranteed customer boast potential liquidity (get your money before the end of the term of the investment fund) but most often it is linked to certain conditions.

What happens after the warranty expires: automatically starts a new guaranteed period? Does the fund continues to operate normally but without guarantee?

Taxation: When is internal security, no problem, since it receives the “background” itself. Where the security is external then the investor receives or participant, and if that amount is taxed as income from capital.

Types of guaranteed investment funds and their potential returns: about here is distinguished from fixed-income guaranteed funds (GRF), which guarantees the preservation of capital a fixed return (APR) on the date of expiry of the warranty and on the other hand we Guaranteed Funds equity (GRV), which consist of a guarantee of preservation of capital but do not guarantee any profitability. In this second type of guaranteed funds, profitability will be subject to market developments.