Many seasoned investors can agree that mutual funds are the ideal investments options especially for those who are still new to the trade or are having difficulty finding time to study how the securities markets work and behave. In definition, mutual funds are a type of investment program that is directly funded by shareholders, trading in several diversified holdings. The offshore transactions involved in this type of investment are the easiest to deal with, especially that they are professionally managed and are often tax-efficient.
In particular, offshore mutual funds can be classified into these categories:
- Equity growth fund
This type of mutual fund is also known as a “stock fund.” Basically, it focuses on the investment in equities, which signify ownership of company shares. This is one of the most aggressive and risk-driven mutual funds available, but also among the most potentially profitable.
- Fixed-income fund
The focus of this fund is in the short-term fixed income securities. Some examples of this type of mutual fund are treasury bills, government bonds, commercial paper, and corporate bonds.
- Money market fund
This type of fund invests in short-term debt securities (commercial paper and US Treasury bills). It’s a relatively safe and open-ended mutual fund that provides decent yield.
- Balanced fund
Some investors prefer this type of fund for two reasons: low-risk and potential for capital appreciation. Aside from being a safe option, it allows investors to invest in a particular asset class based on the set minimum and maximum amounts. It is mainly a combination of bonds and stocks.
- Stable income fund
The purpose of this type of fund is to produce an income stream for its shareholders through putting money in securities that provide interest payments and dividends.
- Emerging market fund
The unique thing about an emerging market fund is its concentration on the investment of securities from several emerging economies in the developing world. This provides high chances for significant growth.
For a deeper understanding of these offshore mutual funds, consult with an advisor from leading offshore investment firms, such as LOM Financial.