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A fund is a straightforward way of building a diverse portfolio

Investing through a fund ia a simple way to invest in a large number of different things. When you invest your money through a fund, you are 'teaming up' with hundreds, or even thousands, of other investors. The investors in a fund turn over the investment decisions to a fund manager, who devises an investment strategy and buys shares and other assets in line with the fund’s investment objective and their view of the markets. 

Funds make it easy to mix shares in different companies, bonds and other asset types. This reduces the impact of one investment doing poorly on the overall value of your investment.

You should get independent investment advice before investing in a fund

Unless you are an experienced investor with a very clear idea of how you want to invest, it is a good idea to talk to an independent financial adviser about your options. Large asset management companies – like AXA Investment Managers – offer a big range of funds covering many different investment strategies. Choosing a fund to invest in can be almost as confusing as buying shares in individual companies.

If you have been gifted or inherited units in a fund, it’s also worth talking to an investment adviser before you decide what to do with them.

You can find an independent financial adviser on unbiased.co.uk. This is a website with national listings of independent financial advisers that can help you find an adviser in your area.

  

Frequently asked questions'

Find out more about funds

Discover how to invest in a fund and where to get advice.

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Things to consider when investing in a fund

How much risk you want to take

Funds offer a spectrum of risk, from stable returns with a relatively low chance of your investment losing value, to the potential for large gains but also large losses. It is important to find your place on this spectrum before you invest. What are your return expectations? How much are you prepared to lose if things go wrong?

How much the fund manager charges

Charges will be an overall drag on your investment return, but this doesn’t mean that cheaper is always better. Low-charging passive funds – which invest automatically according to market movements – will never outperform the overall market. An active fund manager that undertakes in-depth research and market analysis to find the best investments will cost more but has a greater chance of performing ahead of the overall market.

How the fund has performed historically

Past performance is not a guide to current or future performance but understanding how a fund has performed in different market conditions and against its rivals can you help you decide if a fund fits your needs.

The fund manager’s approach to responsible investing

Many investors today want to make sure that their money is not making the world worse. This can include things like protecting the environment, treating workers and customers fairly and making sure companies they invest in on your behalf are run ethically and efficiently. Many asset management companies now have responsible investment policies you can read to check that they reflect your own beliefs. You can even invest in funds with an explicit goal of helping to alleviate environmental or social problems.

Investing tax-efficiently through an ISA

An individual savings account (ISA) is a way to protect a proportion of your savings and investments from UK capital gains and income tax. UK residents who are taxpayers can usually invest up to £20,000 each year through an ISA (as at July 2023), although there are different types of ISA available and your options will depend on your specific circumstances. An ISA is usually offered through an investment manager or bank.

To find out more about investing in an ISA with AXA Investment Managers, please refer to our Supplementary Information Document.

What to do next

You’ll find more guidance on how to invest in a fund with AXA IM or elsewhere in our FAQs. 

  

Find out more about investing

Helpful information to help you understand your investments.

Fixed Income

Investing in bonds

A bond is like a loan that pays regular interest and a final lump sum.

Equities

Investing in shares

Owning a share in a company gives you a stake in its success.

Glossary

Your A to Z of key investment jargon

Key investment terms explained.

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    Disclaimer

    This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 22 Bishopsgate London EC2N 4BQ

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

    Risk Warning

    The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested.