An investment fund is a financial product composed by dozens of securities from several entities, such as shares, bonds and other assets, which allows to distribute the risk. The management of the fund is made by professionals of a management company and must be considered as a long term investment. This product does not hold guarantee of profitability or of the invested capital.
An Investment Fund is composed by units named Net Asset Value (NAV) which are autonomous fractions, with identical characteristics, that in their whole represent the value of the global asset of the investment fund, in a determined time.
Investment funds are composed by different classes of assets such as shares, bonds and liquidity.
The most common types of funds are:
- Short term: invest in funds with high liquidity presenting interest rate profitability close to the market;
- Bonds: invest essentially on public debt bonds or bonds issued by companies, on a mid/long-term standpoint;
- Shares: invest mostly on shares, being exposed to a higher risk but with more profitability potential on a long-term standpoint;
- Alternatives: are complex instruments given the higher degree of freedom regarding the establishment of management rules;
- Multi Assets: invest simultaneously on shares, bonds and other financial assets;
- PPR: destined to prepare retirement, with a favorable fiscal regime.
The sale operation of an Investment Fund, of which you are a part of, is called Redemption.This operation can be done at any time for open Investment Funds. For closed Invetsment Funds, the Rdemption can only occur during a fixed period of time. Redemption Orders are not immediate, there is a period of time between the given Redemption Order and the efective deposit of the amount in the Current Account. This is called Settlement. You can see the number of days you will have to wait for the establishment of a Redemption Order in a specific Fund by consulting its Detail in "Transaction Rules".
Investing in Investment Funds has associated risks that you must consider and consult beforehand. Because this is a product without guaranteed capital, whose Net Asset Value varies throughout time, there is no certainty about the return of your investment. This could be positive, null or negative. The profitability presented by the Investment Funds are a part of the past and are not guarantees of future profitability.The currency-exhange factor is another risk that must be considered, once there are Funds in several currencies such as Euro, Dollar, Pound, among others. The relation between the Fund's currency and Euro is an important factor that must be considered when investing. All the assets in the Fund, such as Stocks and Bonds, have an impact on the Fund's value. So, analysing the allocation, geography and sectors is important in order to understand in what way some events can impact the Investment Fund.