Investment and funds

Investment funds are collective investment vehicles that pool the money of investors and then invest it in an investment portfolio that is comprised of stocks, bonds, or other assets. Each fund is managed by a person who decides on what to buy and sell, and charges a fee for managing the fund. There are various kinds of investment funds. They include unit trusts (UCITS), OEICs and open ended investment companies (OEIGCs).

When you are considering investing in funds, it is important to think about the motivation behind why you are doing this and the length of time you’d like to invest for and your investor profile that defines your willingness to take risks. For instance, investors who are younger may have more time and feel more comfortable with a higher level of risk to maximise growth over the long run.

With regards to saving, one of the best methods to reduce risk is to diversify. Diversification is the process of spreading your money across various asset classes that have less correlation in their price fluctuations. This allows you to reduce the value loss in one particular asset class through an increase in another asset class.

Another way to mitigate risk is through using’smart beta’ or low-cost investments. These are funds https://highmark-funds.com/2021/07/08/generated-post-2 that are managed by passively which attempt to replicate movements of a specific index of the stock market, such as the FTSE 100, or S&P 500 without the need for judgment.