The subject of investments has become a topic that has aroused the interest of many people today. Even if it is something that is fashionable, talking about investments is absolutely necessary for anyone.
However, it should be noted that there is also a lot of misinformation regarding investments, and that is why many people prefer to avoid touching the subject, thanks to the fear that has been generated.
And precisely to put an end to this generalized fear, it is necessary to clarify all the doubts and uncertainties that have been generated around investment funds in Colombia.
Therefore, today’s article will be dedicated to one of the most controversial financial topics. Here we will tell you exactly what mutual funds are and how they work today. In addition, we will discuss the types of funds that exist in Colombia and their main characteristics.
Stay with us for all the details!
What is an investment fund?
When we talk about an investment fund, we refer to any type of investment in which a group of people participate with the objective of making an investment to generate profits. When investing, the aim is to achieve a return on that investment.
Generally, mutual funds are composed of equities with variable income and fixed income bonds, however, depending on the type of fund, their composition may vary taking into account the level of risk and the terms of the investment.
How do investment funds work in Colombia?
Investment funds function as a vehicle for managing the resources of a group of people who seek to obtain a return taking into account market conditions.
When the money is collected from the participants, this capital is delivered to a group of experts so that, according to the regulations established for the fund, it can be invested in assets that will generate some type of profit for each of the participants or investors.
Generally, mutual funds are the easiest way to access an investment in assets, since investing individually would require more experience in the stock market and more knowledge in the financial area.
When collective investment funds emerge, the fund manager designs an investment strategy focused on the purchase of different types of assets with different levels of risk and different returns. The idea is to match the investment to the risk profile of the investors.
Types of investment funds
The following are the types of investment funds that exist in Colombia. Take note!
Fixed-income mutual fund
This is a fund invested in fixed-income assets. That is, bonds, financial obligations, promissory notes, bills of exchange, etc.
Some of the investments are, for example, short-term fixed income assets, such as the money market, or medium and long-term investments such as the capital markets. In addition, investments will never be variable.
Equity mutual fund
This fund invests in equity assets. Their risk level is higher due to the fact that the investments do not completely guarantee a safe return.
Mixed investment fund
In this case, the idea is to combine a fixed-income investment with an equity investment. By making both investments. Here, equities usually provide the highest returns, but fixed income is a lower-risk investment.
Guaranteed investment fund
This is a fund that assures profitability at a certain date. These are usually funds that require the money invested to be held there for a long term.
Real estate investment fund
The idea of this type of fund is to raise resources to acquire real estate, such as buildings or shopping centers. In this case, the profitability will be in the future and will be the result of leasing or asset appreciation.
Global investment fund
These are funds whose policies offer more freedom, since it is not necessary to establish from the outset the percentage to be invested, whether in fixed income or equities.
Now that you know the types of investment funds that exist in the country, do you already know which one you would like to invest in? Register and you will be advised by our experts