How It Works?
Overview When you buy units in an investment fund, you pool your money with other investors to buy shares or bonds. Funds have different goals, called investment objectives. A fund's objective determines what kind of securities it buys and guides a professional manager in picking individual securities for the fund to buy. The fund's brochure will tell you what its investment objective is.
There are many different kinds of funds. A fund may invest primarily in one type of security (for instance, shares). It may even focus on a particular kind of share (a growth fund buys growth-oriented stocks whereas a sector fund may buy only stocks in a particular industry). Some funds, such as growth-and-income funds or balanced funds, invest in a combination. Some funds invest in all three major types of securities (shares, bonds and short-term investments). They are called asset allocation funds or balanced funds. The amount of money allocated to each type at any time depends on the manager's forecasts about which type is likely to do well.
Why Invest in Funds?
A full-time professional money manager or investment committee chooses the fund's investments based on the fund's objectives. Because the fund buys many different securities, your investment risk is lower than if you were relying solely on any one of those securities alone.
Unlike most financial products, but like shares and bonds, an investment mutual fund's price (except for a money-market fund), yield and return will vary and you may make a gain or loss when you sell your units in the investment fund.
Type of Funds
The product range covers all conventional asset classes as well as more specialized products such as global sector funds or niche equity funds like emerging markets or smaller companies.
Equities Funds
Equities are the investment vehicles that deliver the best returns over time. But, in view of the swings that can occur over short periods of time, equities are best suited as investments for the medium or even long term.
Country-Specific and regional funds
Funds specializing in investing in equities in a specific country or economic area. The investments tend to be focused on large-cap stocks in the relevant markets.
Small-Cap funds
Those industries chosen to be the focus of sector-based funds on the grounds of technological progress or structural changes sweeping through them enjoy above-average prospects for growth. They can thus offer investors the prospect of handsome returns.
Sectoral funds are funds invested in industries that benefit from technological progress or changes in the structure of the current economy. These companies offer opportunities for above-average growth and thus promising returns on investments. To grasp new trends, our sectoral funds rely on the expertise of our advisory committees composed of renowned specialists in therelevant sectors. Special advisory boards help us to understand new trends.
Balanced Funds
Balanced, mixed or diversified investment funds adhere to a pre-defined investment strategy. The investments are made worldwide, in a whole range of instruments including money-market vehicles, bonds and/or equities. A fund manager or an investment committee splits the investments between these three different asset categories according to his expectations about how the markets are going to move. The breakdown of investments is also subject to the various investment constraints imposed on him. The fund manager's overriding aim is obviously to achieve the best returns.
Fixes-Income Funds
Money-market and bond funds both come under the heading of fixed-income vehicles. The regular payment of interest, which is often re-invested, but which can also be paid out, provides a reliable and constant stream of revenue for the investor.