Investment guides UK for a secure investment in fundswritten by Bella Palmer
Invest in funds
Investing in funds and investment trusts is one of the most common ways of investing that are recommended under investment guides UK for small investors. If you buy individual shares, it means you should have deep and current knowledge regarding the market and its functioning and spread your investments after calculated risks. But by following investment guides UK options, investors can pool their money with others and buy funds and have access to a wide range of investment options. The investment guides UK choices also allows investors to minimize risk by distributing their investments and not keeping all the eggs at one place.
There are a number of options for doing this, which include ‘funds’. There are a number of investment guides UK to invest as well which include professional assistance or tracking a certain index or following popular markets.
Funds can be divided into:
- Unit trusts
- Open-ended investment companies or OEICS.
Under investment guides UK investment options, investor’s money is pooled to invest in shares, bonds or other funds. The underlying idea behind pooling money is that there is lesser risk by investing the pooled money in the shares and bonds of different companies than investing it in a single company. According to the best investment guides UK, investing across companies is the most advisable option for investment. Almost all funds have a fund manager, who is typically an expert in investment. A minimum of £500 to £1,000 investment is necessary for accessing a fund. The value of the investment varies depending upon the performance of the assets.
Funds come under two categories which are:
- Accumulation class or Acc - All dividend income is rolled back into the fund to boost growth.
- Income class or Inc - Dividend is paid to those who want dividends as income.
Two charges are involved in investment funds which include an initial charge and the annual management charge. The initial charge, as the name suggests, is a sizeable amount of money charged at the beginning which can be up to 5 per cent but it can be avoided if you go through a good broker or platform, whereas the annual management charge may be around 1.5 per cent and includes the cost of paying the fund manager and running the fund. Financial regulations stopped these payments for new investments and new clean funds are in place, which typically include a charge of 0.75 per cent to 1 per cent. These do not include any commission back to advisers or platforms.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.