Many investors pool their money into Canadian investment funds. Financial professionals manage the pooled money and invest that money on the investors’ behalf. The money managers create the mutual fund portfolios. The individual investors receive the portfolios which are held in trust for them. Canadian investment funds have specific investment objectives which determine how they are to be managed.
When you invest your money into Canadian investment funds, you purchase a certain number of units. Each unit you own is a share or fraction of the fund’s total value. There are many types of businesses that offer Canadian investment funds such as banks, brokers, investment dealers, trust companies and independent financial advisors. Just as with mutual funds everywhere, Canadian investment funds require a minimum investment amount. The usual cost for the first investment amount is between $500 and $2500. Thereafter, you will be able to invest for less. Some people actually invest as little as $25 to $50.
Once you have made an investment into one of the Canadian investment funds, you may be able to set up an investment plan where money will be contributed to your plan on at whatever intervals you choose. You can choose a weekly contribution plan, or you can invest twice a month, monthly or even quarterly. With the right strategy, you can prepare for your future in a way that you don’t really notice the money leaving your bank account.
Canadian investment funds allow you versatility in choosing the type of mutual fund you are most interested in. There are Canadian equity funds, money market funds, balanced funds, fixed income funds, and international funds. The money market fund is the easiest fund to liquidate. These funds are stable and you incur very little risk when you invest in them. Money market funds usually invest in high quality investments like Treasury Bills. These are short term investments that can be easily traded. If you are looking for a short-term investment with minimal risk, the money market fund gives a better return than many other types of funds.
If you are new to investing, you might want to do some research on all the different types of funds, and then talk to your financial advisor or mutual funds manager. Fixed income funds represent shares in securities like bonds and mortgages. This is a good investment for capital gains. If you are interested in Canadian investment funds that are long-term, you might consider the Canadian equity fund. This fund gives dividends that you can accept or reinvest into the fund. If you want to build equity, this is one of the best types of funds.