An open investment fund is one in which any investor can enter it by buying new shares.
If an investor is interested in entering an open investment fund, new participations are created for the investor to buy. That is, there is no limited number of shares of the investment fund.
Characteristics of an open fund
One of the main characteristics of this investment vehicle is the reinvestment of new capital. That is, with the cash invested by the new investors, the manager will reinvest it in assets for the portfolio.
On the other hand, investors can reimburse their shares at the net asset value at any time they wish. In this case, the shares are sold back to the fund.
Types of commissions
There are a number of commissions that an open fund can impact on investors. We detail them below:
- Management commission:The fund manager charges a commission for that management. This commission is established with a percentage of the fund’s assets.
- Subscriptioncommission : It is the commission charged for the acquisition of shares. It is established with a percentage of the total invested
- Reimbursement commission:Performed by the reimbursement of shares. A percentage is calculated on the redeemed capital deposit deposit: this refers to the cost per deposit of the assets and the capital of the investors.
- Commission on results: itis a charge in relation to the benefit obtained by the investment fund.
It should be noted that of all these commissions, only the management and deposit would be the one we would have safe as investors. The other three would depend on the format or policy of the investment fund .
On the side of the subscription and reimbursement commissions there is the so called “liquidity window” to not pay these commissions. That is, there are certain periods of liquidity where subscriptions and refunds have no commission. As an example, let’s imagine a liquidity sale on day one of each month. That is, if we reimbursed on day one of any month we would not have a commission.