There is no way to accurately state how long it will take for an investment fund to generate the desired return, as this will depend on a few factors. Among them are the characteristics of the modality itself, which, as we explained, can be fixed or variable income. Each type of investment has its own rules, but the return is usually higher in the long run. That is, the longer it takes to redeem the amount invested, the higher the amount corrected for interest. In case of the Common Sense on Mutual Funds this is important.
As a general rule, those who invest in mutual funds are not interested in the short term, but in the medium from two years and long term from five. To calculate how long it takes to generate the return you expect, you need to check net profitability, excluding the administration fee and income tax collection. As an example, in 2018, the highest yielding fixed-income investment fund returned 9.1% at the end of the year. Thus, who invested $ 10,000 earned $ 910 in the period.
Now that you know how investment funds work and are aware of the rates and risks involved, it’s time to address the main types of funds in the market. Let’s go to them.
Fixed Income Fund
Considered one of the main modalities of investment funds, the fixed income fund focuses on fixed income assets. Thus, the strategies are related to interest rate and