Investing in a protected fund could be one of the safest investments that you ever take. The protected fund is a type of mutual fund that guarantees at least the initial investment amount back to the investor regardless of what happens the market. This guarantee is provided through the use of an insurance policy on the initial investment. In order to qualify for this, the investor has to invest their money for a predetermined period of time. If the investor asks for their initial deposit back prior to this deadline, they may not be able to get their initial investment back.

How They Work

Investing in this type of fund allows the investor to gain some access to the investment market without risking their initial capital. Fund managers of this type of fund may invest in stocks, but have a tendency to invest in more fixed income investments such as bonds. The fund managers do not want to take much risk because they know that they need to at least keep the initial deposits of the investors in tact. Therefore, you should expect a smaller return if any with this type of investment.

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