Funds
A fund pools money from many investors and uses it to buy a collection of investments, such as shares or bonds.
1 min read Learning to Invest
What it means
A fund pools money from many investors and uses it to buy a collection of investments, such as shares or bonds. Instead of choosing every investment yourself, a professional manager or set of rules decides what the fund owns.
Example
You invest £100 into a global fund that owns shares in hundreds of companies around the world.
Why it matters
Funds make it easier to build a diversified investment portfolio without having to research individual companies or buy lots of them individually.
One fund can contain hundreds or even thousands of investments.
What's the advantage of a fund over buying individual shares?
A fund spreads your money across many investments, reducing the impact if one performs badly.