Mutual funds – Foundation of a good investment portfolio

15 Jul 2019

What are Mutual funds?

Mutual funds are the foundation blocks of any complete retirement investment portfolio. They aim to provide long term gains that grow your retirement capital and reduce risk.

The bulk of most pension and provident schemes are invested in mutual funds to give steady growth and to mitigate any risk. Risk is spread out over hundreds of different groups of assets or securities.

There are many different types of mutual fund categories to choose from depending on your level of risk and asset class interest e.g. emerging markets, new technologies, global equities etc.

It is recommended to speak to your deVere adviser to assist in tailor making a mutual fund portfolio that best suits your individual financial needs and risk profile.

How do mutual funds work?

“A mutual fund pools money from different investors in order to invest in a large group of assets (also known as securities) such as stocks and bonds. Professionals manage the holdings that make up the fund’s portfolio; investors buy shares that rise and fall in value based on the performance of the funds underlying securities.” – (Nerdwallet.com)

“Mutual fund investors don’t actually own the stock in the companies the fund purchases, but share equally in the profits or losses of the fund’s total holdings – hence the ‘mutual’ in mutual funds.”

Any lump sum or monthly pension contributions are used to purchase more shares or units in the various funds, thus increasing its overall value.

Mutual funds are managed by full time expert fund managers, who reduce volatility and risk through diversification.

Benefits

•    It’s easy and hassle free. Fund managers do all the work once you find a good fund with a reliable returns history.
•    Professional active management. Fund managers make daily decisions on buying and selling the securities held in the fund, based on the fund’s goals.
•    Affordability. Mutual funds generally have lower fees and monthly contributions can be made instead of lump sum investments (monthly pension/provident fund contributions).
•    Liquidity. Mutual funds are easy to buy and sell.
•    Diversification. Mutual funds are spread out over a diverse range of assets and securities which mitigates your risk of loss. - some info taken from Nerwallet.com

dVAM Fund platform

Using deVere’s Fund Platform is a great way to invest in mutual funds at a lower rate. It offers world class diversified funds actively managed by leading asset houses. https://www.devere-am.com/


Contact your deVere adviser for more information on mutual funds and the deVere Fund Platform on [email protected]