Learn more about different types of funds and how to choose one for your portfolio
If you are looking to start investing in the markets or would like help with managing your investments then funds or collective investments are worth considering for your portfolio.
One of the major advantages of funds is they allow you to cost-effectively build a diversified portfolio. By investing even a few hundred pounds in a fund you can get exposure to far more companies and indices than you could by putting money
directly in the market yourself.
In addition the vast range of funds available allows you to choose a particular geographic market, a range of industry sectors or a specialist asset class such as bonds to suit your investment objectives.
There are two main types of funds – active and passive.
Active funds are run by a professional fund manager, who selects what goes in the portfolio. The aim is to beat their benchmark index and outperform the market, to give you premium returns.
Passive or tracker funds aim to mirror, or track, the performance of a key benchmark or index such as the FTSE 100.
Benefits of investing in funds
Diversify your portfolio – when you buy a fund you get access to the range of investments held by the fund. As many funds invest across the global
markets you get exposure to markets and companies that are not normally easy to deal in
Expert fund management – if you choose an active fund the fund manager will aim to beat their benchmark so if you pick a good one you may do better
than the overall stock market
Choice – you can choose from over 2,000 funds with us and many funds offer access to specific asset classes, markets or geographical locations
Easy to manage – the fund manager will make the investment decisions for active funds so you don’t have to follow the markets. If you choose a tracker
or passive fund it will track the fund benchmark or index
Flexible – funds can be held in Stock and shares ISA, SIPPs and Dealing accounts and are exempt from stamp duty
Different types of units or shares
When buying funds you will often see the acronyms ‘Inc’ or ‘Acc’ after the name of the fund which indicate the different classes of funds. You can choose which type of units to buy to suit your investment strategy and time horizon.
An 'income' class class pays out dividends directly into your Dealing account, ISA or SIPP
An 'accumulation' class, rolls up dividends and other forms of income and puts them back into the fund, with the effect of increasing the value of each unit or share held
Need help choosing a fund?
Need a hand choosing your investments? You can get a few suggestions from our experts, or even let them do the hard work for you. Just have a look at our easy investment ideas.
It is simple to invest in a fund online. You will need to open an account first and then choose the fund you are interested in investing in. There are over 2,000 funds to choose from but to make it easier for you we have created the AJ
Bell Favourite funds list which is our picks of the best funds.
There is a £1.50 dealing charge for buying and selling funds with us and a custody charge for holding the fund. In addition you will pay a charge to the fund which is often called the fund manager's charge. These charges are included in the
fund price and can be found on the fund factsheet. To view our costs for dealing and holding funds please
visit our charges and rates page.
Save regularly using funds
You can save from £25 per month into a wide range of funds with our regular investment service. You set up the instruction online and we will invest each month for you into the fund of your choice. This is a great way to save regularly and
build up your portfolio. For more information please visit our regular investment page.
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For nearly twenty years, AJ Bell Youinvest has helped people invest in the life they want to live. We’re part of AJ Bell, one of the largest investment platforms in the UK, with £52.3 billion in assets under administration.
"Very user friendly website, easy to set up account(s) and easy to monitor investments. Also, plenty of helpful information to help make investment decisions."
"I am glad I opened an ISA with your company, massive range of investments & shares that you can choose from. I will definitely refer people as AJ Bell is a fantastic company
who has a dedicated team that is very helpful and always willing to help, respond back to you very quickly especially if it’s an urgent matter."
"Very straightforward to set up an account online and arrange ISA transfer in to my account."
"Easy to use and excellent support when needed. Reasonable charges."
We’re here to make things easier for you
Sometimes tackling your investments can seem like a real headache. That’s why we strive to do one thing here at AJ Bell Youinvest – to make investing as easy as possible for you.
AJ Bell is now one the UK's largest online investment platforms, with £52.3 billion in assets under administration.
We’ve succeeded by staying true to our beliefs, by understanding your needs as a DIY investor and by providing award-winning accounts, backed up with excellent service at a low cost.
Regulated by the Financial Conduct Authority, we take your security as seriously as you do, and have comprehensive measures in place to keep you and your money safe. You can find out more by visiting our security centre.
So whatever stage you’re at, we’re sure we can help you manage your money and your future.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.