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AN AFFORDABLE WAY TO MAKE YOUR MONEY GROW IN INVESTMENT FUNDS
ARE THERE OTHER BENEFITS TO SAVING IN INVESTMENT FUNDS?
*Investment funds* are not fixed-term investments, so they are highly flexible. Generally you can increase, decrease, stop, suspend or resume payments at any time without penalty and you can keep your plan for as long as you wish. Whilst you should aim to save for the long-term, you can withdraw money when you want, and you do not have to give advance notice.
Costs and charges are shared by all of the fund's investors. Information about charges for investment funds is supplied to you before you buy. Charges are transparent and are outlined in detail so that you can see how much you will have to pay and what you are paying for. You should not have to pay extra for a monthly savings facility. As well as outlining available monthly savings plans IMA's "Find a fund" search also shows the initial and *annual management charge* for each fund. The literature you receive before you buy will also help you to understand the nature of the fund and will outline particulars such as its investment objectives, details about the *manager* and past performance. Please note that past performance is no guarantee of future returns. You should treat past performance data with care and use it in conjunction with other information in order to determine whether a fund is suitable for you. If you are unsure about whether an investment is suitable for you, you should contact an authorised financial adviser for assistance.
You can expect the same level of service and attention regardless of the amount you choose to invest. This is because *investment funds* pool your money with that of many other savers to form a *portfolio* managed by professional *fund managers*. Having a portfolio means that any money you put into a fund is diversified. It is spread across a range of investments so that the *risk* of losing money is reduced if a particular investment does badly.
Any profits made when you sell your investments are free of *Capital Gains Tax* (CGT) up to the annual CGT limit of £9,600 for the 2008-2009 tax year. And there are further advantages if you choose to invest through an Individual Savings Account (ISA). In an ISA there is no CGT or income tax to pay on any profit or income you receive. For more information about ISAs, IMA produces an "Investing in ISAs" fact sheet. See "How can I find out more?" for details of how to obtain a copy.
There are hundreds of *investment fund* monthly savings plans to choose from, ranging from those investing in *cash*, *bonds* and gilt to ones which invest in stock markets. For details of funds sold to the public you can search IMA's "Find a fund" service to help you compare funds by the types of investments they make. |
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