How Do Different Types of Funds Work and How Can They Benefit Your Investment Portfolio?

By: King San Jose Santos, RFP, CTA, CFC, FIFC

Fellow | Corporate Finance and Investment, IFC Canada

An investment fund pools capital from investors to invest in diverse assets like stocks, bonds, real estate, mutual funds, and ETFs, offering access to a diversified portfolio that is difficult to build independently.

Benefits of Investment Funds in your Investment Portfolio

Investment funds provide diversification, reducing risk by spreading investments across various assets. Professional management can achieve higher returns than self-directed investing in your investment portfolio.

Accessibility and Affordability

Funds are accessible to individual investors with low minimum investments, democratizing market access. Pooling resources lowers costs through economies of scale, reducing fees.

Investment funds are essential for individual investors seeking a diversified portfolio, offering cost-effective ways to grow wealth and manage risk, with options for different investment goals and risk profiles.

Some clips from our master class training with the National Institute of Accounting Technicians

Key Features:

1. Pooling of Resources: Investors contribute funds, which are collectively managed.

2. Professional Management: A fund manager or team of managers makes investment decisions on behalf of the investors.

3. Diversification: Funds often invest in a variety of assets to spread risk.

4. Liquidity: Many investment funds allow investors to buy or sell shares relatively easily.

5. Types of Funds:

   • Mutual Funds: Managed actively or passively, focusing on a wide range of asset classes.

   • Exchange-Traded Funds (ETFs): Traded on stock exchanges, often passively tracking an index.

   • Hedge Funds: Use aggressive strategies, typically available to accredited investors.

   • Private Equity Funds: Invest in private companies or buyouts.

   • Real Estate Investment Trusts (REITs): Specialize in property investments.

   
   

   Understanding basic Risk profiles of the fund

   
   

Advantages:

• Accessibility: Allows small investors to participate in large-scale investments.

• Expertise: Managed by professionals with in-depth market knowledge.

• Risk Reduction: Diversification helps minimize individual investment risk.

Introduction to JP Morgan Fund

Want to know more about the JP Morgan Fund and other Investment funds?

Schedule an online meeting with us today. Click here >