What is a Fund?

Investment funds, which are also known as “mutual funds” or “collective investment schemes,” are made up of capital pooled by investors who share the same goals. Their assets are invested in stocks, bonds, or other securities, according to the goals and policies of each particular fund.

Advantages

Mutual funds offer a number of advantages:

Participation, at a reasonable price, in a diverse portfolio made up of a wide variety of securities that might otherwise be unavailable to investors
Funds are managed by specialists, who use research and analysis tools unavailable to the average investor
Optimal returns and reduced risk, due to portfolio diversification
Outstanding purchasing flexibility: you can usually sign up to make pre-authorized contributions, which is a proven investment strategy
Access to your money at any time: funds can be sold at any time. You may be charged a penalty upon selling depending on which type of institution you bank with

Your Rights

After buying shares in an investment fund, you will receive the fund or portfolio prospectus by mail. This legal document contains important information, including :

Your rights as an investor
The types of investments made by your funds
The funds’ investment goals
The fund managers’ investment strategy
Details of the fund’s management fees
The list of registered plans in which you may invest

Legislation on securities typically gives you the right to terminate a contract of purchase and the right to cancel all subscriptions within a given period of time.