What is a Voluntary Accumulation Plan?
Voluntary accumulation plans are an example of an investing strategy that allows incremental contributions to a mutual fund. Over time, the use of a voluntary accumulation plan allows the mutual fund shareholder to build a substantial position with the fund. This can be an excellent solution for anyone who wishes to build an investment portfolio, but is not in a position to invest a large sum of money at one time. Along with the advantage of being able to build up an investment over an extended period of time, the voluntary accumulation plan has the benefit of being an investment option with mutual funds that are considered to be relatively low risk. While it is true that low risk investments do not yield a high rate of return, the investor can still anticipate a profit that is higher than the average rate of interest on a standard savings account. For an investor who does not have a great deal of disposable income, this aspect of the voluntary accumulation plan can be very attractive.
