When a person wants to invest in a fund, they must acquire shares of the fund. The shares represent a fraction of the fund’s equity.

In a fund, all investors have the same rights and receive the same treatment. There are no preferential returns or investment opportunities offered exclusively to some investors.

People and companies can invest in a fund as long as they have the right investment profile, as described in the fund prospectus.

If it’s a closed fund, the purchase frequency of shares depends on the investor and the fund’s offers. In an open fund, the investor can buy shares whenever they desire, directly through INVERCASA SAFI.

The prospectus is the document that establishes all the fund characteristics, such as the investment policy, the subscription process or purchase of shares, the reimbursements of shares, investor profile, risk rating, information about the management, etc.

The liquidity of the shares of an investment fund depend on the type of fund:

The assets of an open-ended fund are redeemed directly by the fund in the time-frame established in the prospectus.

The shares of a closed-ended fund must be sold through an Stock Exchange, which is why their liquidity depends in the offer and demand of the market.

The value of a share of a fund is calculated daily and is the calculation of the fund’s equity divided by the number of outstanding shares.

The assets in which a fund invests in depend on the type of fund:

Financial funds invest exclusively in financial assets such as government bonds, private companies or banks bonds, stocks, repurchase agreements, and bank deposits.

Real estate funds invest most of their assets in properties, which are leased for the purpose of generating income for the investors.

Megafunds are a special type of funds which invest solely on shares of other investment funds.

The investment policy of a fund details how the assets of a fund must be composed. In other words, the investment policy determines the type of assets, the countries and sectors (private or public), the currency, the credit rating, required liquidity, and the objective duration of the assets in which the fund can invest.

A fund generates different kinds of expenses, such as the external auditing fees, legal expenses, credit rating fees, bank fees, taxes, management fees, among others.

In the case of real estate funds, the expenses include insurance, maintenance, repairs, improvements, brokerage fees as well as the external auditing fees, legal expenses, credit rating fees, bank fees, taxes and management fees

The return presented to the investor is net of all expenses and fees which the fund must incur, including the income tax. This is important because the investor receives a fiscal benefit by investing through a fund instead of investing directly in the market.

An investment fund cannot offer a fixed return, since it depends on the return of its portfolio.

In a financial fund, opportunities and market conditions may change frequently, thus impacting the fund’s return.

On the other hand, the return of a real estate fund depends on the rental prices, properties price, and level of occupation of the properties inside its portfolio, among others.

Yes, an investor can decide how many shares they wish to sell through an exchange if it’s a closed-ended fund or how many shares they wish to have redeemed if it’s an open-ended fund.

According to article 280 of Law 977, Law to Reform the Tax Concertation Law, investment funds will pay the following definitive withholding rates:

Art. 280 Investment funds.
The following definitive withholding rates are established for the promotion of Investment Funds:

1. The IR on income from economic activities will be taxed with a definitive withholding rate of five percent (5%) on the gross taxable income; and

2. Capital gains generated by the sale of any type of asset to or from a fund will be subject to a definitive withholding rate of seven point five percent (7.5%).

3. Income received and derived from participation certificates issued by an investment fund will be subject to a definitive withholding rate of seven point five percent (7.5%).

Investment funds are strictly supervised by the Superintendence of Banks and Other Financial Institutions (SIBOIF), in addition to undergoing a credit rating by a duly authorized company twice a year and an annual external audit.

On the other hand, INVERCASA SAFI has an Internal Auditing Unit and a AML Department.