It is a great opportunity to grow your money and reach long-term financial goals. It’s also a strategy that can be done with the assistance of professional advisers, who help you to balance the need for primary protection and growth potential with your financial circumstances and comfort with the risk.
With investment funds, your as well as other investors’ savings are pooled together. A fund manager can purchase, hold and sell investments on your behalf. Most funds are made up of a mixture of assets, which can help to reduce risk associated with investing. Certain funds are more specific for instance, like ones that focus on commodities or property. There are also multi-asset fund that could contain a mix of various asset types, including shares and bonds.
Certain funds are focused on certain regions or sectors such as emerging markets or green investment. Many funds have specific objectives for investment, such as the reduction of unsystematic risk or aiming at a certain amount of growth. Others have a more general goal, like low-cost investing.
Your investment period and your approach to risk will determine the type of unit trusts, OEICs, and investment trusts you select. For instance, younger investors are more likely to accept greater risk and may be more inclined to choose funds with more equity-based investments. Alternatively, those who are approaching retirement or have family obligations may prefer to take an easier risk and select a fund with a higher percentage of bonds.