Many individuals want to invest in stock market but they are facing some barriers such as time, financial knowledge or money. With long-term investment strategies, open-ended fund can meet the needs of those investors.

Long-term investment strategy

Open-ended fund’s investment strategies often focus on long-term since long-term investment would be more effective than short term. Even after inflations, returns from investing in equity have been higher as proven in many countries.Usually returns from investing in stocks over a long period have historically been higher than from investing in bonds after inflation in many countries. Usually returns from investing in stocks over a long period have historically been higher than from investing in bonds after inflation in many countries.Usually returns from investing in stocks over a long period have historically been higher than from investing in bonds after inflation in many countries Usually returns from investing in stocks over a long period have historically been higher than from investing in bonds after inflation in many countries. The VN-Index from 31 July 2000 to 31 December 2013 had an average profit rate of 12.68% per year excluding dividends. Therefore, long-term investment helps funds to avoid short-term volatility in security market and fund could invest in equities at lower average price.

Adequately address issues of limited time and financial knowledge

If you are busy and do not have much expertise in finance, you will probably encounter many difficulties in either daily monitoring stock exchange for hours, or in understanding details of financial information as well as companies’ business performance for price valuation of its equities. However, when investing in an open-ended fund, financial professionals can effectively support you in addressing these issues.

Properly address the problem of limited financial sources

Besides, limited personal financial sources can be addressed since the amount to invest in an open-ended fund is also appropriate for individuals with middle income. The amount of initial investment in the fund is reasonable for many families, only VND 5 million and VND 1 million for subsequent investments. When investing, if you need to use the money invested, you can still withdraw some or all of the invested money by selling fund certificates to the fund.

Benefit from a large investment portfolio

Since an open-ended fund raises capitals from many investors, thus, the fund asset will be allocated to many different asset classes, which also means risk diversification. As each asset class always has hidden risks, investing in a multiple asset classes is recommended. As a result, even though you only invest a small amount, you still enjoy the benefits of a large investment portfolio.

For example, for VCBF Tactical Balanced Fund, the fund invests 50% of its total net asset value in equity and 50% in bond. This allocation can be changed flexibly up to 75% for each asset class depending on which is the most beneficial asset class for  investors at that time.

For these reasons, open-ended fund can bring high profits for long term investors. In addition, the longer the investment period, the more you can accumulate thanks to earning compounded interest. Therefore, for non-professional investors with limitations of time and financial knowledge, long term investment is obviously more profitable than investing by themselves in short term.