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Short term investment fund

Investing in short term investment funds

Earning money in the financial market during the prosperity period is pleasant. Green indicators are growing, the market is growing, and with it investments. However, when there is a correction of optimism, it escapes. The profit desire replaces the fear of losses, at best zero.

The optimal solution for such a situation is to find an investment that behaves in the opposite way to stock exchange ratios.

The solution may be investment funds which earn money in the course of the bessy

It is a solution for brave and experienced investors. The investment should be made at the time of clear saucers. The correction is then to be greater than the increases. The investor may benefit from making up for potential share losses caused by stock market adjustment. In the event of a change in trend, however, funds of this type will record losses.

The composition of the fund portfolio depends on the current market situation. When managers are convinced of the unavoidable inheritance, the proportions in the portfolio will change in favour of derivatives.

Short term investment funds have a reason to play sharply. They may use strategies reserved for closed end investment funds. This is why derivatives are included in the structure of assets.

Reference to checking whether the investment is advantageous or not can be a 100% WIG20short index. This is the case for Polish short term investment funds.

The minimum amount of entry to the investment is 200 thousand. PLN This level is regulated by the provisions of the act on Specialised Investment Funds. The next deposit is min. 100 PLN.

Short term investment fund portfolio portfolio

The portfolio of the short investment fund may look like this, for example

WIG20, WIG40 futures contracts (short position) - 70%

Debt instruments - 30%.

or yes, where treasury securities constitute a majority

Treasury debt securities - 70%

Other assets - 30%: Derivatives, currencies, real estate, cash and receivables, participation units, investment certificates, deposits.

For the possibility of investing in these or very specialized investment funds, the fees are also special. The purchase fee is max. 3.5% (min. from 0.75% up), for maximum management. 4.0%.  In the whole group of short funds available to investors, there is a great diversity in both the strategy and construction of funds. Of the 38 funds, the vast majority, 36 are foreign exchange funds, and 2 are PLN. 

The aim of the investor in the case of investments in short term funds should be to hedge the portfolio against losses. The second option is to play for declines when the investor is aware of market trends. Thanks to investment funds, it is not necessary to follow investments as carefully as in the case of futures contracts.


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