What are Investment Funds?
Investment funds are pooled funds that can invest across different sectors, countries and product types. Investing in funds helps diversify risk and reduce costs, while giving you access to a wide variety of markets. The fund is managed by a professional fund manager whose job it is to aim to maximise returns while minimising risks. Returns are made on the rise of the investments.
Investment funds can be classified into four broad categories:-
Open End Funds - In open ended funds units can be sold and purchased at the Net Asset Value (“NAV”) on any trading day. Hence, they allow investors to participate directly in the markets with greater flexibility.
Close End Funds - Closed end funds issue all of their shares on the first day of its opening. Consequently, a close-ended fund’s market value rises and falls like individual stocks.
Exchange-traded funds (ETFs) - ETFs are investment funds traded in the stock markets. They are an attractive investment option due to lows costs and stock-like features.
Hedge Funds: - Hedge funds face less regulation than other type of investment funds. As a result, Hedge Funds can invest in a wider range of securities such as derivatives and leverage in both domestic and international markets.
Investment funds should be considered for medium to long-term investment plans. Your Relationship Manager will work with you to identify which funds best suit your strategy - whether as the cornerstone of a long-term investment plan or to complement your existing portfolio.