Join the ALFICommunity

You can invest in an investment fund by acquiring units or shares issued by it.

Investment funds that take the legal form of an investment company with variable capital (Société d’Investissement à Capital Variable – SICAV) or an investment company with fixed capital (Société d’Investissement à Capital Fixe – SICAF) are capital companies and issue shares. If you invest in such a fund by purchasing its shares, you become a shareholder of the fund, in the same way that you become a shareholder of Microsoft if you buy Microsoft shares. The stocks you buy are kept on your securities account with your financial institution.

Investment funds with the legal form of a fonds commun de placement (FCP), however, issue units. In acquiring them, you do not become a shareholder of the fund, but a co-owner of the fund’s assets. Your fund units are also held on your securities account with your financial institution.

There are two ways to acquire investment fund units or shares:

For funds whose shares are traded on the stock market – the so-called Exchange Traded Funds (ETF) – just place a purchase order with your financial intermediary (bank, broker, online trading platform …).

For funds that are not traded on an exchange, you need to subscribe to shares or units issued by the fund, and this again with a financial intermediary (bank, independent broker, distribution platform, asset manager…). In this case, you buy the shares or units directly from the fund itself.

The procedure is the same if you want to leave the fund and withdraw your money. Either you place a sell order with your financial institution, or you ask the fund company to buy back your shares or units.

Keep in mind that the costs of these various methods of trading can differ a lot. We will give you a more detailed overview of these costs in our post titled “A successful fund investment starts by comparing conditions”.

The Stock Exchange, marketplace for investors

Read the article

SICAV, SICAF, FCP … which structure to choose?

Read the article