Everyone needs to know how a fund works before parking their funds for excellent returns. It requires research and planning. It is called fund strategy. Experts in investment strategy help high net worth individuals and funds to multiply their capital.
Various fund strategies are available in the market. The returns from each fund vary. You need to choose the right fund based on your risk appetite, investment horizon, purpose, and available funds. Past returns of the fund may not be a measure for future performance. Therefore, experts at Global Venture Management help to find the best fund that expects to provide handsome returns with reduced risks in the future.
Types of Funds for Investment
You need to know the types of funds available for investing your hard-earned money. Some of the funds to park your funds include Private Equity Fund, Hedge Fund, Real Estate Fund, Venture Capital, Bond Funds, and Crypto Funds.
Private Equity Funds
PE (Private Equity) Funds park their funds in private companies. They also invest funds in public companies and hold a stake. It requires the skills of expert financial professionals at Global Venture Management to identify the companies like family-owned businesses, late-stage companies, how much fund is to be invested (controlling or a minority stake), geographic focus, and industry focus to enhance returns.
PE funds buy a minority or controlling stake in private companies and transform them into profitable companies and divest them. The investment horizon varies from 3 to 6 years. Therefore, people, who need considerable returns over the long term, can choose this fund and get improved returns. It is one of the safest investments for retirement, education, child marriage, house purchase, etc.
Hedge Funds
Hedge funds are different from PE funds. These funds park their funds in listed stocks. Investing in these funds requires industry focus, trading strategies like manual, AI, and process, holding horizons like short or long, and economic rationale. Experienced professionals at Global Venture Management choose the best stocks based on their expertise and your risk appetite to enhance your capital. They collect massive information and data before hedging.
It is suitable for young investors, who still have around 25 years of service and are ready to take a risk, to enhance their returns. They can still earn income even if they lose some amount. It is not suitable for people in their 45s.
Venture Capital Fund
It is similar to a PE fund. However, it invests small amounts in startups. It is a high-risk strategy. The funds invest in small startups with an expectation to grow in size and become large companies at a later stage. The finance professionals identify the companies that have scope for higher growth in the future. It is ideal for high-net-worth individuals and young investors.
Bond Funds for Retirement
These are debt funds that invest in corporate and sovereign funds considering their returns. You need to seek the help of experienced financial professionals to identify bonds that will offer considerable returns with lower risks. People, who are likely to retire soon, can park their funds in Bond Funds.
Infrastructure or Real Estate Funds
These funds park their investments in assets like hotels, public infrastructure, self-storage, low-cost housing, etc. It provides handsome returns over the long term. Those with a long-term investment horizon can choose these funds.
Global Venture Management on the Various Types of Fund Management Styles
A mutual fund is a set of securities that are managed by a finance expert professionally. Due to several advantages, from diversification to expert management, mutual funds are a favored investment type amongst all classes of investors. However, while selecting the best mutual fund, several investors miss out on a significant decision they should be making — selecting the best fund manager.
Global Venture Management believes that a fund manager ultimately decides what stays in the mutual fund investment. This decision can influence the overall returns of the mutual fund considerably. With their experience, investing style, and research at their hand, they have total control over the corpus and its ability to make lasting wealth.
After filtering out fund managers on the basis of their qualifications and experience, we come to the most significant feature of a fund manager, their investment style. The way a fund manager invests can be divided into several types of styles. Each style serves a certain risk appetite and fits best for a certain point in the economic cycle of the stock market. Broadly, fund management styles are of three major kinds –Value, Growth, and Growth At Reasonable Price (GARP).
Value Style
This style of investing derives profit by investing in undervalued securities. Fund managers who work in this style buy undervalued equity at lower prices, and then hold them till they reach their peak price. This style works on the idea that security can be undervalued for several reasons other than cost, and thus, they have the prospective to reach a new high. That growth is what the fund manager takes advantage from. The value style makes up for what the expansion style lacks — the system works best in the bearish stage of the stock market, while it can also work perfectly in other phases of the market.
Growth Style
As the name says, fund managers which invest with a growth style tend to invest according to the growth potential of the security, which they trait to the current and future corporate earnings. These managers select to pay attention on companies that are leaders in the sectors they function, with high retained earnings which point out more prospective for growth.
This style is ideal for when the market enters a buoyant phase, as these successful stocks do even better in this stage. However, it is hard for the manager to maintain returns at the time of a descending spiral in the economy when the condition is unwelcoming for all stocks.
Growth At Reasonable Price (GARP)
The GARP style is a blend of the value and growth style.
A fund manager following the GARP style will invest the corpus in a limited number of securities, which have given reliable returns. Rather than picking stocks from a benchmark index, the manager shuffles amid varied stocks from different sectors, to take benefit of the growth happening in the sectors as per the present stock market situation.
Global Venture Management thinks selecting a good blend of fund management styles, by selecting the most appropriate fund manager, can make sure that an investor’s corpus can offer maximum profits as per the circumstances at hand.
