Funds vs Shares

I’ve been actively learning about investing since 2014. Although primarily interested in investing in shares I have recently been investigating Funds. Funds invest on behalf of the fund holders into a diverse range of investments. There are a wide variety of Funds with different goals.

As a ‘retail’ investor I have more limited options in how I invest than a fund manager would. Fund managers have other markets they can access, such as investing in non-listed companies, infrastructure or property. Depending on the rules/constitution of a fund its managers can also access other financial instruments such as currency hedging or leverage (borrowing to invest).

There has been some debate about tracking funds, which follow market indexes, versus active funds that have managers making decisions that hope to outperform the market. Given the recent trouncing of share prices in the UK and US stock markets, it will be interesting to see if these tracking funds remain in favour.

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