Why invest in investment funds?

Why invest in investment funds?

Why invest in investment funds?

Investment funds offer a number of advantages to every investor or saver.

  • Every investor should keep in mind the truism 'don't put all your eggs in one basket'. If you invest in a small number of shares, you put yourself at great risk if one of those shares performs badly. Funds, on the other hand, allow you to invest smaller amounts in a large number of different products or companies, which means that your risk is spread more evenly.
  • There is a suitable fund on offer for every investor profile. Investing in funds is not risk-free. Are you a cautious investor, or are you primarily looking for a good return? Depending on the fund's investment mix, you can run a greater or a lesser risk of losing part of your original capital. In order to take the worry away, there are also KBC investment funds that provide a form of protection for your invested capital.

Are you interested in a specific investment topic, or do you want to choose your own focal points within your investment portfolio? KBC offers a wide selection of funds allowing you to do so.

 

What happens to the returns from the fund?

When you invest in funds, you can normally choose what should be done with the returns from the shares (dividends) or bonds (coupons) that the fund has invested in.

  • One option is for the fund to reinvest the returns, which can then go on to generate further returns in turn. These are then known as funds with capitalised returns. This effect of returns on returns can translate into a handsome extra boost to your yields in the long term.
  • The other option is to withdraw your returns. This can be attractive if you want to derive an income from the return on your investments. In this case, you should opt for funds offering payment or distribution of returns.

The benefits of funds come with certain costs

What's the best way to sign up for an investment? Can you avoid the costs involved in selling a fund, and how does that work?

Learn more about "What are the costs of investing in funds?"

Who are investment funds for?

When you invest in a fund, you can usually decide what happens to the income generated by the shares (dividends) or the bonds (coupons) in which the fund invests:

  • Either the fund will reinvest the income, which in turn may also generate income. In this case, we refer to capitalisation funds. In the longer term, investing in this way could provide you with a tidy additional gain.
  • Or you can have it paid out, which is an interesting option if you want an income from your investments. In this case, you opt for distribution funds.

Investing in funds brings benefits but also involves charges.

Wondering what's the best way to buy into a fund? Or how you can avoid charges when selling shares in a fund and what it entails? Learn more in What does it cost to invest in funds?

Who can invest in investment funds?

You really don't need to a lot of money to invest in investment funds. With an investment plan you can start looking for a higher return on your savings for as little as 25 euros a month.

You also don't need to be an expert on the international financial markets, which are subject to daily price fluctuations. The fund manager constantly adjusts the positions in the fund in response to the current status of the financial markets – a basic service for everyone investing in one of our investment funds or investment-type insurance policies.

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