The returns generated by investment funds are not taxed if we reinvest them in other funds. We only pay tax when the returns come into our possession. There is no taxation as long as the capital is invested.
Transfers between funds provide another significant tax advantage. Transfers between funds are exempt from taxation. This means you can move your money from one fund to another without having to pay tax, regardless of any profits or losses. Remember that investment funds are subject to market fluctuations and other risks related to investing in securities.
The value of the fund units purchased, the performance of the fund and the returns obtained can go down as well as up. This means that you may not get back the amount you initially invest.
In summary, the main tax characteristic of funds is that investors are not taxed until they redeem their investment. Any gains when the investment is redeemed are taxed as capital gains based on the saving and in line with progressive scale applicable to that base.