Step 1 of 2 - Select the potential risk and reward of a fund for consideration
Step 2 of 2- Select a style of investment
Actively managed investment funds are run by a professional fund manager who makes all the investment decisionsActive funds
Advantages - You’re paying an expert to manage your investments and take decisions for you to get the best return, so you don't have to spend time doing this for yourself. The fund manager uses his skill and judgement to make the most attractive investment decisions, within the objectives of the fund.
Disadvantages - You’re paying for the expertise of the manager and the team that supports them, but they might not always make the best decision and if the fund manager changes then so might the performance of the fund.
Passive funds, also known as tracker funds, aim to track the performance of a market index.Passive funds
The fund provider copies the index by buying and selling the same holdings as the underlying index and doesn't need to make independent decisions about what to invest in.
Advantages - This type of fund tends to have a cheaper fund management fee than active funds.
Disadvantages - Passive funds mirror the market or index, so when a market starts to decline, so too does the value of the passive fund.
- Primary aim:
- Fund focus: