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PERSONAL FINANCE
Wealth-building investmentsInvestors can make a profit by selling
units for a higher price (known as the exit
unit price) than they paid to buy into the
fund (the entry unit price).After a fixed period of
time, if the value of the
fund has grown, each
investor will receive a
dividend which they can
choose to keep or reinvest.MANAGED FUND STRATEGIES
Index funds
These funds aim to match the
performance of a particular financial
index, such as the FTSE 100.Actively managed funds
These aim to deliver higher than
average returns. Active managersanalyze, research, and forecast
markets to make investment
decisions on which securities to
buy and hold, or sell off.
Absolute return funds
These funds aim to deliver consistent
returns regardless of whether the
stock market rises or falls.❯❯The value of investments will
fluctuate depending on the stock
market, which will cause fund
prices to fall as well as rise.
❯❯Fluctuations mean that investors
may not get back the original
amount of capital invested.WARNING
TOTAL FUND VALUE = $$$$$Regular savings plan
Many people invest in funds
via regular savings plans.
A regular savings plan can help
investors to maximize potential
investment growth in the long term,
as investing regularly can help smooth
out the ups and downs of the markets.FOR SALE
Today’s price
1 UNIT = $$$$$12 MONTHS
L ATER$$$$
$$US_184-185_Managed_funds.indd 185 07/11/2016 11:22