how guaranteed investment fund gif works
some guaranteed investment income funds also allow people to reset the guaranteed amount during specific periods of time this allows investors to lock in greater sums if they incur a large capital gain for example suppose an investor near retirement age had invested 500 000 into this fund and after an incredible bull run their investment grows to 585 000 in a year by resetting the guarantee at this point the investor has now guaranteed that they will at the very least receive 585 000 concepts of guaranteed investment fundsguaranteed investment funds as their name shows guarantee that all or part of the invested capital will be secure for a specific date in the future and in some cases there is the possibility of almost guaranteed returns a date in the future when all of the fund s shares are guaranteed to reach a specific net asset value guaranteed net asset value only those shareholders that leave their investment until the maturity date will be entitled to the guarantee if a redemption is made before that date then there could be great losses an entity that commits to providing the funds required to ensure the investor keeps their initial investment if the guaranteed investment fund does not perform in a way that generates net asset value when this amount is delivered directly to the fund then there is an internal guarantee if the shareholder receives the amount then the guarantee is external a marketing period is a period during which shares can be purchased from a guaranteed fund without paying subscription fees these do more than ensure that starting capital is secure for the guarantee s maturity date they also ensure set and predetermined returns as stated in the brochure in terms of annual interest apr this means that some guaranteed funds set predetermined dates when the shareholder can receive a total or partial redemption without paying redemption fees to do this you must respect the notice periods stated in the brochure given that these redemptions are done according to the net asset value on that day the guarantee is not applicable and losses may be incurred these only ensure starting investments on the guarantee s maturity date they also offer the option to gain returns linked to how multiple financial assets or indicators perform according to complex calculation formulas investors must take into account that if underlying instruments do not develop as expected then it is possible not to gain any returns 