Making the decisions about when to buy and sell assets
There are many reasons to invest through a fund, rather than buying assets on your own. At a basic level, investing in a fund means having a professional fund manager make investment decisions on behalf of the investor.
Investing in different things, with different strategies
Pooled investment funds – also known as ‘collective investment schemes’ – are a way of combining sums of money from many people into a large fund spread across many investments and managed by a professional fund manager.
Fewer ups and downs than investing directly in shares
If you save regularly or invest a lump sum using a life insurance policy, you might choose to invest in a with-profits fund. These aim to give you a return linked to the stock market but with fewer ups and downs than investing directly in shares. However, they are complex and are not as popular a form of investing as they used to be.
An investment trust is a public company that raises money by selling shares to investors, and then pools that money to buy and sell a wide range of shares and assets. Different investment trusts will have different aims and different mixes of investments.
Investing in a wide range of different tax-efficient investments
Individual Savings Accounts (ISAs) can be used to hold stocks and shares or cash, or any combination of these, up to the current annual limit. An ISA is a tax-efficient ‘wrapper’ that can be used to help save you tax.
