What is a fund?

A fund is capital that is set aside for a specific purpose. In finance, the term is normally used for money that is invested in a specific fund whose task is to provide the best possible return at a given risk level.


Historically, these have given better returns than ordinary bank savings. A fund can be a collection of several stocks and fixed-income securities. As the owner of a fund, you own units in the fund. With a fund saving, you spread the risk and capital over many companies and markets in a simple and in many cases cheaper way than investing in shares directly yourself. A fund is a collective investment where several savers join forces to invest their capital in the stock market.

There are several different types of funds, we will review these in the next pages. You can also read about the specific ones by clicking on the links below:


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