Online fund platform

A fund is a collective investment scheme which pools your money with that of other investors to give you a stake in a ready-made basket of investments.

With the money pooled together from many individuals, fund managers invest in a broad range of assets, such as bonds, shares and property. Their aim is to meet the objective of the fund while staying within its predetermined risk profile. 

An investment fund allows you to invest in lots of different assets without the need to invest in individual stocks and shares.

A fund platform is a service that allows you to research, buy, hold, monitor and sell funds. 

You could think of it like an investment supermarket. It allows you to shop around for funds that match your objectives and risk profile. 

Once you’ve bought your funds, the platform allows you to hold them in a tax-efficient ISA if you choose. It also lets you track their performance and sell them if you need to.

An index tracker, also known as a tracker fund or index fund, is a fund that aims to closely track the performance of an index – such as a stock exchange – by investing in companies within that index. 

Trackers are known as passive investments because the fund manager isn’t actively managing the investment. Tracker funds are designed to offer investors exposure to an entire index at a relatively low cost. 

The drawback of investing in a tracker is the index could be dominated by a particular sector which would leave you vulnerable if that sector were to experience losses.

Unit trusts and open-ended investment companies (OEICs) are both types of professionally managed collective investment schemes, known as funds. 

When you invest in a unit trust, you buy units. When you invest in an OEIC, you buy shares. Either way, you’re effectively buying a share in the fund – which is why we refer to your individual investments as ‘fund shares’.

If the value of your fund’s underlying assets rises, the value of your fund shares will rise. Likewise, if the value of the underlying assets falls, the value of your fund shares will fall.