Advantages and disadvantages of investing in home managed funds

2 min. reading
Managed at home / 2 December, 2021
Advantages and disadvantages of investing in home managed funds

Sofía R. Ustáriz Journalist

In the financial market there is a wide range of types of investments that are adjusted to each investor and vary in terms of profitability, risk reduction, capital to invest, among others. One of those types of investments is mutual funds, which can be an excellent initiative to invest mainly because of the advantages that this system offers.

As its name indicates, mutual funds or investment funds are made up of a group of natural and legal persons who make a voluntary contribution that is managed by experts who will seek the best opportunities in the market to increase profitability.

Advantages of mutual funds

The main advantage of this type of investment is that the capital required is much lower than other types of investments in the financial market. This makes it an accessible option for anyone interested who does not have a high capital to invest.

As a second advantage, the liquidity of this type of investment can be highlighted, which offers the possibility of accessing your money almost immediately.

In addition, it is a type of investment that offers comfort to the investor, since, by delegating the management of their investments, they do not need to get involved in details of asset purchases and/or sales transactions.

Finally, it allows you to have a varied investment portfolio, which is always positive since it allows you to cope with possible fluctuations in the financial market.

Disadvantages of mutual funds

Like all types of investment, there are advantages and disadvantages that the investor must weigh when making the decision to invest. Some of the disadvantages that can be mentioned of mutual funds are:

The profitability of this type of fund is not guaranteed and varies, like other types of investment, from the expertise of the person who manages it and the fluctuations experienced by the financial market.

In addition, attention should be paid to the commissions that the person who performs the management will acquire, since they can be considerably high. In that particular case, it is important to study the market and see which manager is best for you, including its expertise that can make the difference between higher or lower profitability.

If you are looking to get started in the world of investing or are looking to invest without spending too much time, mutual funds are an excellent option that, combined with expertise, can generate considerable returns for everyone involved.

Diversify your portfolio, increase your profits and take advantage of the extensive experience of the financial advisers that are part of BBVA New Gen, who will keep abreast of the best trends in the financial market to offer you the best possible result.


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