10 Tips to keep in mind when investing in Mutual Funds
Natalia Trinidad - Commercial Manager
1. What is the investor profile?
Before making any investment, the main thing is to know how risk-averse we are (conservative, moderate, aggressive). Having defined our profile, we can choose the appropriate instrument(s) to build our investment portfolio. In this case, which mutual fund is the most suitable for us...
In CADIEM we have 2 types of Funds to make investments in Guaranies:
- Mutual fund AVAILABLE
- Mutual fund GROWTH
2. Define the investment objective
Defining our goals makes it easier to choose the right instrument to achieve them through investment. We can choose different funds to achieve different goals.
3. Establish the investment horizon
We have to take into account the time frame of the investment project. How long do we want to achieve our objective, will it be in the short, medium or long term?
In this regard, Cadiem offers funds with different investment horizons:
- Mutual fund AVAILABLE ? for short-term investments
- GROWTH mutual fund ? recommended for investments of at least 3 years and older.
4. Fund Diversification
One of the major benefits of mutual funds is the reduction of risk through diversification, i.e., the single capital made up of investor contributions is held in different instruments (bonds, stocks, ADCs, trusts).
5. The target rates of return
Each mutual fund has a target rate, the qu4.ales are variable and depend on the instruments invested in, the level of risk of each mutual fund and the rates existing in the market, for example in Cadiem the funds have these performance targets:
- Mutual fund AVAILABLE? target rate of 3.5 p.a.
- Mutual fund GROWTH ? target rate of 9% per annum
6. Consider liquidity
Investors may dispose of their capital by requesting partial or total redemptions at any time. There is a maximum redemption amount per account, which is regulated by its own regulations.
7. The term of redemptions
Each mutual fund has predefined redemption terms. It indicates how soon I will receive my money after I make the request
- Mutual fund AVAILABLE 2 days after requesting redemption
- GROWTH mutual fund within 5 days of requesting redemption
8. Are there any charges for redemptions or permanence awards?
Within the internal regulations of each Mutual Fund, the charges for redemptions or permanence premiums are established. These charges are usually related to the investment term of each fund and its profitability objective. At Cadiem, the funds have these characteristics:
- The AVAILABLE Mutual Fund has no surrender charges and rewards on a scale related to average monthly balances.
of each account.
- The GROWTH Mutual Fund, on the other hand, has a scale of charges for redemptions and premiums, depending on the term of permanence within the fund.
Background.
9. How much is the minimum initial contribution, can additional contributions be made?
Mutual funds have a minimum initial contribution, each one according to its own internal regulations. In our country, they are not very high, giving small and medium investors the opportunity to obtain returns equal to those with greater resources. In CADIEM, you can invest from ten million guaraníes. You can also make additional contributions at any time and reach your goals more quickly.
10. Experience and capacity of the Fund Managers
It is very important when choosing a Fund to take into account how good the history of its administrators has been in the work of managing the fund to achieve its volume and profitability objectives. At CADIEM we have been working in the investment area for 15 years and for the last 4 years we have been achieving the expected profitability objectives for the AVAILABLE Fund.
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