Investment funds: an alternative to saving?

Let us state first and foremost that investment funds are no alternative to saving. Whoever starts with fund investing runs the risk of a negative return. When saving, there is no chance of a negative return, although a negative saving interest is getting closer.

In addition, it is advisable to always keep part of your assets in a freely withdrawable savings account for unexpected expenses.

Savings worth less

With the ever-lower savings interest rate and rising inflation, your assets will be worth less. NOS op 3 has already made the slogan on this: note: saving money costs money, following the warning about borrowing money ‘note: borrowing money costs money.

Now that inflation (overall price increase) with 0.6% is significantly higher than the savings rate at the major banks (0.3% as of December 9, 2016) this statement is correct. And then we are not even talking about the capital gains tax above the exempt capital in box 3.

How does a fund invest

With an investment fund, the invested capital is actively managed by investment professionals. Your investment is spread over various investments such as shares and bonds. The price is determined by the value (development). Compare the different investment funds.

Investment fund costs

For this active management of this fund manager, a percentage of the assets under management is withdrawn from the assets (between 0.5% and 2%).

Determine risks yourself

At the start, you determine a risk profile based on your objective, containing the risk that you want to run and the return you are aiming for. The outcome of this risk profile determines the spread of your invested capital. In the meantime you can adjust this if you have come to a different insight.

Risk profile of fund investing

There are roughly 3 different types of risk profiles:

• Defensive risk profile : the risks are limited as much as possible by investing money primarily in bonds. The expected return is therefore also limited. Especially suitable for a short investment horizon and risk-averse investor.
• Neutral risk profile : average risk and return, money in addition to bonds also used in shares.
• Offensive risk profile : highest risk mainly due to investing in shares, but also the highest possible return. Especially suitable for a long investment horizon and with money that you do not need immediately.

Or invest yourself

If you still want to invest actively, see our step-by-step plan to start investing and choose one of the online brokers and open a free trading account.