Planning to invest to travel, buy a home or for a comfortable retirement? Feel you do not have sufficient knowledge to build the investment portfolio to fulfill your needs? An investment fund could be an attractive option.
There are different types of funds to consider before investing such as mutual funds, segregated funds, exchange traded fund etc.
An investment fund is made up of money pooled by investors and managed on their behalf by a fund manager. Investment funds can hold a variety of investments, such as stocks, bonds, and money market instruments.
Investment fund returns are usually in the form of interest paid to investors, dividends or capital gains. Returns depend on investment decisions, the success of the strategies used by the manager and the evolution of the markets.
An investment fund may aim for long-term growth, regular investment income, capital preservation, or a combination of these objectives. Some funds may also have a special purpose, such as supporting economic development and job creation.
7 tips before investing in a fund
- Assess your financial situation and your needs (including for your retirement).
- Establish your financial objectives and when you will need your money (i.e., your “investment horizonAn investment horizon is the period after which an investor will start to withdraw money from their investments. For example, a person who saves money to buy a house in 5 years has an investment horizon of 5 years. ”).
- Determine your risk tolerance.
- Find out about the fees that apply when purchasing or selling fund units, as well as management and operating fees.
- Assess the impact of the fund on your tax situation. You may have to pay taxes even though you did not receive a payment from the fund.
- If need be, seek the advice of a representative registered with the AMF.
- Verify if your representative is authorized to offer you an investment. Consult the Register of firms and individuals authorized to practise or contact an AMF Information Centre agent.
Documentation and tools
- Reviewing Your Personal Finances (pdf - 5 MB)This link will open in a new windowUpdated on 14 June 2016
- Choosing an Investment Dealer or Representative (pdf - 4 MB)This link will open in a new windowUpdated on 22 August 2016
- Choosing Investments! (pdf - 1 MB)This link will open in a new windowUpdated on 6 October 2016
- Red-flagging financial fraud (pdf - 7 MB)This link will open in a new windowUpdated on 23 October 2015