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Investment funds can be a good alternative to buying single shares and bonds regardless of the size of the investment.
An investment fund is a fund that invests in and administrates investment portfolios. As a member of an investment fund, professional investors will invest and manage yours as well as the other members’ fortunes.
The advantages of an investment fund are,
| | that you spread the risk of price fluctuations, as you automatically invest in a pool with different bonds or shares.
| | | that you have the opportunity of getting a higher return on your investments, since the investment fund continuously will look for the opportunity of harvesting capital profit.
| | | that your interests, redemption gains and dividends automatically will be reinvested, in order to ensure that you get a return on your full investment.
| | | that you have lower costs since you do not have to pay the costs of buying and selling the shares or bonds. | Do not forget to think about taxes – what is most profitable for you – capital gain or interests/dividends? Check how you and the investment fund are taxed before you buy. Choose between income unit funds or accumulative funds with a high capital gain. If you are tax exempt of capital gains, then consider investment funds with high capital gain. PAL sections are particularly suitable for pension annuity accounts and capital pension accounts.
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