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Funds explained

Funds, ETFs, Investment Trusts. Not sure where to start?

Start here.

  • Eqi explains

    What do all funds have in common?

    Funds, ETFs, investment trusts: they all share some common characteristics

  • EQi explains

    How to read fund factsheets

    We break down the jargon and answer common questions

  • Insights

    Growth, income or preservation?

    Different life stages will mean that you are looking for different outcomes from your investments

  • EQI explains

    ESG ratings

    What do "Environmental, social and governance" fund ratings mean in practice?

What is a fund?

A fund pools money from lots of investors and is used to buy a range of assets – giving investors an instant stake in a number of holdings.

They are popular as they are a simple way to build diversity into investor portfolios.

Funds are also referred to as Unit Trusts, Mutual Funds or Open-ended investment companies (OEICs for short), and the assets are actively bought and sold by managers aiming to beat the market, to help you profit.

Why do investors choose funds?

  • Reason 1

    Simplicity

    Funds are a simple way of accessing investments from leading companies around the world.

    As you’ll have a share of several different asset classes, it is considered lower risk than buying shares in one or two companies as any change to one share can be offset by the performance of the others.

  • Reason 2

    Expertise

    Because teams of professionals spend their time researching thousands of investments, you’ll typically pay more for an actively managed fund, but there’s potential for much higher returns.

    It also means someone is tactically managing your investments, so when a region looks like it might be on the up, or a sector starts to suffer, the fund manager can decide to move your money around to expose you to growth or protect you from any losses.

  • What do fund managers do?

  • Reason 3

    Choice

    You get to decide which funds to buy into based on your attitude to risk and how long you plan to invest for. With EQi, you can access three independently-researched fund selections:

    • Funds to get you started
    • Funds to build up your portfolio
    • Funds for seasoned investors

Our fund lists, independently rated by Square Mile

  • Why EQi?

    Funds to get you started

    How do you know where to start when there are more than 3,000 funds to choose from? Start with just three, aligned to your appetite for risk.

  • Why EQi?

    Funds to build up your portfolio

    As you build your confidence over time and know what to look for, it helps to have more choice. See our top fund picks aligned to your investing goals and your appetite for risk.

  • Why EQi?

    Funds for seasoned investors

    We've added new fund lists for experienced investors, so whether you're looking to invest in Emerging Markets, US equities or ethical funds, we've got 50 to choose from.

  • EQi explains

    Who are Square Mile?

    Our partner, Square Mile, is one of the most respected investment fund research firms in the UK

  • EQi explains

    How do Square Mile select funds?

    Find out more about how Square Mile selects funds

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