Many entrepreneurs are looking to diversify their investment portfolio and to find a good return for their short and long-term investments. Finding the most suitable investment vehicle can be an efficient means of combining and managing assets, at the same time entrusting them to a professional asset and portfolio manager. This is a short guide on the main types of investment funds and the main considerations when deciding to make this kind of long-term investment.
Types of investment funds
Finding the right investment fund can help entrepreneurs reach and maintain their short and long-term financial goals. There is a sufficiently large selection of investment vehicles and careful consideration is needed, especially since some of them are more suited to experienced investors.
Specialized investment funds can be used for real estate investment projects and are suited for professional investors or institutional investors.
Exchange-traded funds are those that trade like stock on a chosen exchange. Their price varies throughout the day.
Unit investment trusts have a fixed and unmanaged portfolio and investors benefit from redeemable units for a specific period.
Hedge funds are used by investors who want high returns. When properly managed, generally with the help of an investment manager, these types of funds minimize the risk and offer the best return on investment. They are generally suited for high-net-worth-individuals. You can always find more details on hedge funds or talk to a financial specialist.
Mutual funds: a preferred option
Mutual funds are a popular option among investors, even for entrepreneurs who are just starting to use these types of investment vehicles. They are comprised of several funds collected from a larger number of investors. The types of companies used for this purpose can be open-end or closed-end. Mutual funds are affordable, diverse and the portfolio is professionally managed.
As far as favorable investment fund jurisdictions are concerned, popular options include Luxembourg, Ireland, the Netherlands, Hong Kong or Singapore. These countries have beneficial taxation regimes and policies. However, you can always explore other jurisdictions, such as Cyprus. Investors can also start a company in Slovenia and use it for investment purposes.
Entrepreneurs should carefully weigh the investment risks and their long-term investments. It is recommended to seek professional help, especially if you are a first-time investor. You can contact a local financial planner from the country in which you wish to open an investment fund.