What does the investment option ‘drip feed’ involve?

A Branch 23 investment insurance has a higher potential return than a Branch 21 insurance. But there is a risk of loss. You can reduce this risk by spreading your contribution over time. One way to do this is with the investment option drip feed.

With drip feed you deposit your entire contribution at once. Subsequently, a part of your contribution is transferred on a regular basis to the investment insurance. You choose yourself how often and how much you transfer.

The advantage of drip feed is that, if the stock markets temporarily fall, you can buy more units for the same amount. This is because the value of the units is then lower.

Joris deposits € 12.000 into a Branch 23 investment insurance. That amount is first invested in cash. In practice a risk-free liquidity fund is used for this. Subsequently, every month € 1.200 is transferred from that liquidity fund to three different equity funds: € 400 in each fund. If the funds fall in value, Joris can buy more units for € 400. Over a period of 10 months his € 12.000 is thus invested in a spread manner, not only in 3 different funds, but also with a spread entry over time.

Drip feed is a good way to reduce the risk of loss with a Branch 23 investment insurance. It is particularly suitable for investors who have a long-term objective.