https://highmark-funds.com/2021/07/08/generated-post/

Investment and funds

An investment fund is an collective investment vehicle that pools the cash of investors to invest in a portfolio of shares, bonds or other assets. Each fund is managed by a fund manager who decides what to buy and sell and also charges a management fee. There are a variety of investment fund, including unit trusts (UCITS), OEICs, and open ended investment companies (OEIGCs).

When investing in funds, it is important to take into consideration the reasons you are doing it and your investment profile that will reflect your risk tolerance, and how long you plan to invest. Younger investors, for example, may have more time and be more comfortable with a higher risk level to maximize growth over the long-term.

Diversification can be a great way to lower your risk just like saving. This means spreading your investments across several asset classes that have lower correlations between their price fluctuations, so that the fall in value of one class can be offset by gains in a different one.

Smart beta or low-cost investment is another way to reduce risk. These are funds that are managed by passively which attempt to replicate the movements of a specific stock market index such as the FTSE 100, or S&P 500 without the need for judgment.