Funds

Investors in the stockmarket may choose to buy shares in individual companies but they can also buy into funds, which pool investors’ money and invest it in a range of shares.

There is an enormous variety of different funds, each with slightly different aims and objectives.

Some funds aim to provide investors with plenty of income and some focus on capital growth. Some funds invest only in UK companies, some invest only in certain industries and some invest in overseas markets. There are also funds that invest in assets other than shares, such property, commodities and bonds.

Funds are managed by fund managers, staffed with professionals whose job is to select the appropriate shares for different types of fund. These funds help to spread investments and can reduce risk because they invest in a wide variety of different shares. They can also give investors access to interesting opportunities.