Short Investment Grade
  • A short investment grade no load fund is a popular investment choice and offers many benefits
  • A short investment strategy is ideal for money you will need in a short time but do not plan to use until then
  • A short term investment plan can help you earn a better yield on investment capital you are not using for a time period, instead of leaving it in a savings account

Any investor who has a short investment strategy and does not want their investment capital tied up for extended periods of time may want to consider a short investment grade no load mutual fund. A short term investment plan normally includes protecting your original investment capital, while putting your money to work for you earning a return for a short time frame. These mutual funds are more about smaller returns in exchange for much lower risks of a loss, while some other fund types prefer high yield but riskier investments for higher earnings. Choosing a no load fund will prevent you from paying load fees, which can be eight percent or more of your investment capital. This is money that is taken as a sales commission for directing you to the funds you invest in. With some research and knowledge, you may be able to pick the best fund instead of relying on a broker or advisor who may have a conflict of interest in this matter. Some load funds also pay a commission for brokers who direct new accounts to them, so you may not be able to tell if the fund chosen by the advisor really is the right one for your investment needs or if the fund just offers a bigger commission to the broker. Ethically a broker or advisor should disclose this information to clients, but many do not. By doing the work and choosing your own funds for your investment amount you will know that your investments are in the right place for your needs and strategies.

Short term investment grade mutual funds use their investor capital pool to make investments in investment grade securities, which have lower risks as well as lower yields. Protecting your investment capital is the highest priority with this type of mutual fund, and the investments are made for short time periods only. This usually means a matter of days or months. A short investment strategy can be used for many reasons. You may be close to retirement and want to have your money work for you until you retire. Another reason is that you have a large sum of money that will be needed for a specific reason within a short time period, and putting this capital in these mutual funds will earn a higher yield than leaving it in a savings account at your bank. These funds are very liquid, so that you can easily get your investment capital back in a short time period, so that it is available when you need it. Most have very small minimum investment amounts, sometimes as low as one thousand dollars or less.

One short term investment grade fund that is used is the Vanguard Short Term Investment Grade Fund- Investor Shares Class, which trades under the symbol VFSTX. This fund has a portfolio with assets valued at more than twenty billion dollars, but the management expense is somewhat high at point two one percent. The Annual Portfolio Turnover may seem high at forty nine percent, but taken in context along with the fact that this fund invests only in short term investments this percentage is not a bad one. Anyone considering this fund as part of their short term investment plan will need a minimum investment of three thousand dollars to open a taxable account. Whether you choose this fund or a different short investment grade no load fund, this mutual fund type can be a great investment if you have money available for safe investment for a short period of time. These funds can offer decent returns while protecting your initial investment amount against losses or tying your capital up for a long time.