best site

Funds and investments

Investment funds are investment instruments that pool the funds of investors and then invest it in a portfolio consisting of bonds, stocks, or other assets. Each fund is managed by a person that makes decisions about which assets to purchase and which to sell, and charges an administrative fee to manage the fund. There are many kinds of investment fund, including unit trusts (UCITS), OEICs, and open ended investment companies (OEIGCs).

When you invest in funds, it is essential to consider the motives behind doing so and your investment profile that is a reflection of your risk tolerance and how long you plan to invest. Younger investors, for example may have more time and be more willing to take on a higher risk level in order to achieve the highest growth over the long-term.

As with saving one of the most effective methods to reduce risk is through diversification. This means spreading your investment across a variety of asset classes that have less correlation between their price movements in order that a decline in value of a class can be offset by gains in a different one.

Another method to reduce risk is to use smart beta or low-cost investments. These are funds managed in a passive manner that attempt to replicate movements of a certain index of the market such as the FTSE 100, or S&P 500 without the need for judgment.