A Managed Fund is run by an investment manager and usually concentrates on something specific – whether it is UK equities, global equities, a technology fund etc. All the investments that they make will be along the same theme.
The investment fund will in many cases have a good spread of different companies it is invested in, and the majority go for something like 50 to 60 underling investments. Needless to say, the bigger the fund the more investments it will have.
If you are investing your own money and you pick company ABC Ltd then you are focussing on just one company which means that you need to do a lot of research on that company. On the other hand, if you invested in a fund, and that fund has 50 to 60 underlying investments, then your money will be better spread throughout those 50 to 60 companies and that will eliminate some of the risk.
If something goes wrong in one company, then in many cases it could be no big deal whereas if you only invested in one company on its own then that could be an enormous problem. By investing in a fund therefore you can accommodate one or two companies not working terribly well but balanced out by others that are doing well so you get a far better spread of risk.
This is why we invest in funds as opposed to individual companies. At MAP Finances UK our dedicated team support clients by managing your investments using our recommended funds list, whilst always allowing you complete transparency and oversight of your investments.
To explore investing, or indeed to discuss taking control of your existing investments contact us today.
The value of your investment is not guaranteed and can fall as well as rise.
The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries call 0345 241 1808 or contact enquiries@mapfinances.co.uk
