Investing in open-ended funds is for the medium to long-term. Usually returns from investing in stocks over a long period have historically been higher than from investing in bonds after inflation in many countries. Therefore, funds can bring higher returns if you can invest long term. However, how long you should invest into an open-ended fund depends entirely on your financial goals and the amount you plan to invest monthly. Being prepared for the long-term is important to be able to accommodate the normal cycles in the equity markets.
Example: If you want to reach the amount of VND500 million and you plan to invest into an open-ended fund with
VND3 million per month, assuming an average rate of return of the fund is 10% per year, you will need to invest for approximately 9 years. (This example is illustrative only and that is not the committed rate of return of any funds of VCBF).
The amount you should invest in open-ended funds per month depends on your financial goals, your timeframe which you need to withdraw money and the amount you can save each month. With VCBF Tactical Balanced Fund, after the initial subscription of at least VND5 million, you can invest a minimum of VND1 million per month or per quarter.
Example: If you want to achieve in the amount of VND800,000,000 in 10 years, assuming the average rate of return of the fund is 10% per year, then you need to invest VND3,910,000 per month.
The fund management company is responsible to repurchase all fund units at the net asset value of each fund unit deducting the redemption fee (if any) from all investors wishing to sell.
An open-ended fund is an investment product with no defined time of operation and can continue indefinitely.
You should invest in funds open as soon as you determine your financial goals. These can be savings for retirement, to buy a home, a car, starting a new business or to pay tuition fee for your children. If you make the investment early, you will get a step closer to your dreams. Delaying investment only increases the burden on you and makes achieving your goals more difficult.
No, in the short term, funds may have lower or higher returns than bank deposits. However interest rates of bank deposits are fixed and the returns are defined for specified periods, normally short to medium-term. As the fund's investment objective is to provide long-term total return via growth of capital and current income by investing, its returns are not fixed and can be higher.
Markets can be volatile, up and down. However, because of the investment in an open-ended fund is a long-term investment, one key to living with market volatility is focusing on long-term results rather than the daily bumps along the way.
A Systematic Investment Plan is ideal for investors to avoid market fluctuations. Investing with regular fixed payments lowers the average cost per unit than the average unit price, irrespective of market fluctuations. As more units are purchased when the price is low and fewer units are purchased when the price is high, the investor with a regular fixed investment amount automatically benefits without having to monitor prices or the NAV on a daily basis.
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