Investing2 min read
Investment fundGerman: Investmentfonds
An investment fund pools money from many investors and invests it in different assets according to a defined strategy.
In plain language
A fund may hold stocks, bonds or real estate. Active funds make investment decisions; passive funds usually follow an index. Diversification and costs vary considerably between products.
Let’s make it concrete
A fund invests 60% of its assets in stocks and 40% in bonds. A share represents your participation in that pooled portfolio.
Simplified example for illustration.Worth understanding
Several funds may hold the same companies. The number of funds you own therefore says little about your actual diversification.
Read more from official sources
For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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