“I have R20 000 that I plan to invest for a two- to three-year period. I am considering the Coronation Capital Plus fund and will add a monthly debit order of R700 into the fund. Is this an appropriate investment strategy considering the time period?” asks Dimitri.

Maya replies: The Coronation Capital Plus fund is a lower-risk equity fund that focuses on capital preservation while providing long-term growth by investing across various asset classes including bonds, cash and property. It aims to outperform inflation by around 4% per annum. The fund is often used for people wanting to draw down an income from their investment, but it can also be used for shorter-term investment periods of around three to five years.

If you plan on keeping your investment for three years then this fund is appropriate. If, however, you are only investing for a two-year period then there is a potential of a capital loss if the markets fall significantly during that period. The Coronation Strategic Income fund would be more appropriate for a two-year investment period. The fact that you will include a debit order will also help lower your risk – should the market fall from current levels you will be able to buy more units with the same amount of money.