Focusing on mixed funds
As the name suggests, mixed funds offer a good mix. These are funds that consist of equities and bond funds and thus offer a good balance between risk and return. If things are going well on the stock market, the fund management can invest primarily in equities; in worse times, bond funds are more the order of the day. On the whole, however, the portfolio in funds is mixed and thus offers an interesting potential with a relatively well calculable risk. The diversification effect is generally very large, so that mixed funds are definitely interesting.
For beginners who want to focus primarily on security, funds of funds are also very interesting. Here, investments are made in various funds and the risk can be calculated well in any case. Without extensive market knowledge, you as an investor with funds of funds do little wrong and can normally always take a return. The very large spread of risk offers the greatest advantage. However, in many cases, funds of funds also incur higher costs than other funds, so you should definitely make a precise comparison here in order to weigh up the costs and benefits against each other.
Index funds and money market funds under the microscope
Additionally, you can also wrap your investment in index funds. This is an attempt to replicate a stock index as closely as possible. The DAX, for example, is one such index, in which you will find the 30 most important stocks. You can therefore find the individual shares from the DAX in an index fund, for example - also in the same weighting as they play a role on the stock market. At least this is the case in very many cases. Index funds are often cheaper than other funds and can therefore be very interesting for investors. This is primarily because no active management fees have to be paid, since it is a passive fund.
Short-term investments such as time deposits or overnight deposits can be found in money market funds. These usually only have a short term to maturity and are very low risk. If you want to invest money in the short term and achieve a return with a high probability, you can simply become active here. Money market funds are more lucrative than savings accounts and other forms of investment, but in the overall picture they offer only a very low return with Exness free swap. For the big money through the purchase of funds, money market funds are therefore not necessarily recommended. On the other hand, you can rely on a certain degree of security here.
Open-ended real estate funds round off the range of funds on offer
Finally, you also have the opportunity to invest in open-ended real estate funds, which have only a low risk for you as an investor due to their broad diversification. By law, open-end real estate funds must consist of at least 15 properties, which can include land, residential buildings and commercial space. The purchase is as simple as with equity funds, the same applies to the possibilities of sale. A real estate fund achieves its return through regular rental income and through a general increase in the value of the buildings. However, a loss in value can also have negative consequences for you as an investor, which you should definitely take into account.
Using the potential of funds for your own investment
As an investor you have versatile possibilities with funds, which can influence the own trading. Basically, all types of funds are well suited for you as an investor, depending also on the risk you want to accept. Funds are suitable for risk-taking traders as well as for investors who value stability and security. A detailed comparison can help you find the right funds for you, so that you can optimally make and align your investments. Bond funds in particular offer a high degree of security, while equity funds are a bit riskier.