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TRICKS
& TRAPS - OFFSHORE MUTUAL FUNDS
We believe that mutual funds are an
attractive investment vehicle for the following reasons:
- Fund managers may trade the underlying investments
actively without concern for income tax consequences.
- International mutual fund houses have enormous
resources available and are able to investigate
asset classes and choices thoroughly.
- Mutual funds are strictly regulated and reduce
risk by spreading their investments across many
counters.
- They have large capital resources, enabling individual
investors to gain access to investments not normally
available to individual investors.
The majority of fund management companies
tend to use "top down", "bottom up"
or a combination of these two investment styles. Mutual
funds also offer a variety of fund structures, such
as individual funds, fund of funds and multi-manager
funds.
No single approach has been "on
the nose" at all times. We strongly recommend a
blend of investment styles within an investment portfolio,
including a spread between investment houses. We also
believe that it is important to select fund management
companies which seek consistent returns within a given
risk ranking.
There are no stipulated investment
terms or withdrawal penalties from mutual funds, so
money may be withdrawn at any time. We do, however,
recommend a minimum investment period of 5 to 7 years
to allow for adverse market fluctuations. We draw your
attention to the fact that capital invested in these
funds is not guaranteed. |
