A fund explained

  • A fund is simply another way to buy shares. 
  • Instead of you buying a slice of a company directly, you give your cash to a specialist manager who pools it with money from other investors (like you) to go and buy a job lot of shares in a stock market.
  • Each fund is made up of 'units', so if you want to invest you'll need to buy units.
  • The value of each unit will rise or fall depending on demand in the market for the fund.

  • Funds can invest in almost anything – countries, energy, gold, oil, even debt.

  • All funds have a theme – anything from geography (European, Japanese, emerging markets), industry(green companies, utility firms, industrial businesses), types of investment(shares, corporate bonds, gilts), to the size of the company.

  • An FTSE 100 tracker fund invests in the UK's 100 biggest companies and therefore is much more mainstream.

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