Whatever your financial objectives and attitude to investment risk, there is probably an investment fund for you.  Investment funds are available to invest directly or via an ISA.

 

Most investment funds diversify your investment across a wide range of assets.  For example a fund that invests in shares may hold between 50 and 100 different companies shares.  This spreads and so limits risk.

 

If you wish to find the best fund for you, please Contact Us or use the Enquiry Form.

 

The following is a list of some of the main types of fund:

 

Absolute Return Funds

 

These funds aim to give returns in all investment conditions i.e. rising and falling markets.  This is achieved using a range of financial instruments.  At the heart of most absolute return funds will be a normal long portfolio of stocks and shares however the manager will generally aim to mitigate downside risk through the purchase and sale of options and the short selling of shares. 

Not all absolute return funds achieve their objectives however there are some very good funds available that have delivered consistent inflation-beating returns.

 

Corporate Bond Funds

These invest in loan stock that is issed by companies.  In general the lower risk rated loan stock of the larger companies.  These are less risky than shares because the company has an obligation to repay it's loans before paying shareholders.  For more information about corporate bond funds, click here.

 

Equity

Equity funds buy stocks and shares.  There are many different types of fund available including some that are very specialised

• UK Equity funds can be growth funds, that tend to invest in large and medium sized companies shares.  The manager will not be concerned about yield although the fund may still have a reasonable yield from the larger companies.
• UK Equity Income funds will tend to invest in the largest 100 companies and the manager will look for high and consistent dividend payments.
• Non-UK Equity funds (See Overseas Equity Funds below)
• Small company funds invest in public limited companies that are in the bottom 10% by market capitalisation.  Small company funds may be UK or overseas.
• There are also funds that specialise in companies that are to be found in the FTSE 250 and 350 indexes. 

High Yield Bond Funds

These are similar to Corporate Bond funds (See above) however the risk-rating of the bonds is higher.  These often pay a higher yield.  Growth can be better as the manager will seek to invest in the bonds of companies that are improving thier financial position leading to the risk rating of their bonds being improved. 

For more information about high-yield bond funds, click here

 

 

Overseas Equity Funds

These invest in shares on overseas stock markets.  The most popular for UK investors are European, North American, Far Eastern and Japanese stocks.  The emerging markets of Brazil, Russia, India and China are also easy to invest in through Equity Funds that invest overseas

 

Small Company Funds

These invest only in the shares of smaller companies, which can offer the potential for faster growth in good times.

 

Trackers

These funds aim to track the performance of a major stock market index.  The most common in the UK being the FTSE 100.