The advantages of joint investments

• Leverage the fund manager's specialist skills
• By joining forces with thousands of other investors, you can access investment opportunities closed to individual savers
• Your risk is spread, so your investment does not overly depend on the fate of a single company
• Remember that the value of investments can go down as well as up and the investor may get back less than what he invested

Funds invest in different types of underlying assets, helping you spread your investment risk. If you invest in a small number of companies by purchasing their shares, you will be exposed entirely to the destinies of those organizations. By investing in a fund, however, your savings are invested in hundreds of companies, making you less dependent on the success or failure of a single company, and creating a diversified portfolio

waystrade investment funds

Equity funds

The risks associated with equities can be reduced by investing in equity funds. A manager selects a range of stocks in order to reduce dependence on the performance of a single company.

Furthermore, the choice of companies in which to invest is left to the professionalism and experience of the manager, who will select the securities for which he foresees the best prospects.

Most equity funds fall into one of the following categories

• Growth-oriented funds - the goal is long-term capital growth. The fund manager selects the companies with the best potential in terms of share price appreciation.
• Income Oriented Funds - which aim to generate attractive income for investors. The manager selects those companies that pay regular dividends and whose share price tends to be less volatile than that of other companies.

Bond funds

Investing a component of your portfolio in bond funds can be a good way to achieve greater diversification and stability. Bond funds can be of different types and vary according to the type of bonds in which they invest: from government bonds to corporate bonds; from bonds with short maturities to those with longer maturities; from bonds issued in Developed Countries to those of Emerging Countries.

Bonds are loans taken out by companies (corporate bonds) or governments (government bonds) in order to raise capital. They are in effect credit declarations that promise to repay the borrowed sum on a set date and to pay a fixed interest rate over the duration of the loan.

Overall, government bonds are considered to be safer than stocks as it is a sovereign state that guarantees their payment. Corporate bonds, on the other hand, are subject to the risk that the company will be unable to honor its loan or default on interest payments.

Balanced and asset allocation funds

This category is divided into traditional balanced funds and dynamic asset allocation funds (also called new generation balanced funds). While the former are characterized by a static portfolio consisting of shares, bonds and cash, the latter follow a dynamic asset allocation strategy whereby the composition of the funds is regularly optimized over time, so that investments are always oriented to the asset classes which are more likely to record positive performances at a given point in the economic cycle. This discipline introduces two other asset classes with a view to increasing diversification and improving performance: real estate and commodities.

Money and liquidity funds

These funds invest in short-term monetary securities in order to deposit capital that may be needed in the short term. The advantage for individual investors is represented by the possibility of benefiting from higher interest rates, normally precluded to them as private savers.

Real estate funds

Real estate funds can represent the ideal solution for those who want to limit the risk associated with the purchase of a single property and spread it over multiple assets. Obviously, there is always the risk of a downturn in the real estate market, although some funds reduce this risk factor by investing in different countries or in different types of properties.

Most real estate funds focus on the commercial branch, such as offices, warehouses and shops, but some also include a residential component. As a rule, these funds distribute regular income but also offer the possibility of reinvesting them for those who are aiming for long-term growth.

Real estate funds are divided into two categories:

Traditional real estate funds

Traditional real estate funds invest directly in brick. The fund deals with property research, sale and purchase negotiations, tenant search and building maintenance. Investors' returns consist of any revaluations of the properties held by the fund as well as a rental component.

It is important to note that traditional real estate funds can be difficult to sell, so it is not always possible to make investments when needed. Your sell instructions may be delayed or restricted on withdrawals. Furthermore, the value of a property is the result of subjective judgments rather than objective calculations.