Benefits

Benefits of using Funds
Funds are pooled vehicles that combine the money of like-minded investors and use the resulting “pool” to purchase a range of shares, bonds or other assets with the aim of meeting the investors’ needs. Their advantages fall into three main categories:

Access to more companies
By pooling your investment with that of other people with similar objectives, you can gain exposure to a wider range of investments than you would be able to buy on your own. This increased diversification means that poor performance from one company can be offset by good performance in another area of the fund.

Expert help
Investing in a fund also allows you to benefit from the resources, experience and expertise of a professional fund manager and research team.

Move with the times
Many funds are also actively managed, which means that the manager will seek to adjust the portfolio to benefit from changing investment opportunities. For example, the fund may add to telecom companies if this part of the market is expected to do particularly well, perhaps due to changes in regulation or a range of new services that are expected to enhance profits.

Conversely, an active manager will look to sell any company or part of the market that is likely to perform badly. Well-resourced fund managers are able to stay on top of company and market news flow in a way that private investors cannot. As such, they are better-equipped to position portfolios optimally for the market conditions.

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