What different types of funds are available?

• Equity funds  A fund is a “pot” into which investors put money. This is invested by the fund management in various securities, such as shares or bonds, based on certain criteria. This means good diversification can be achieved even with a low level of investment. There are various types of funds: if a fund invests in shares, it is called an equity fund. Real estate funds invest in property. invest money in shares. They often focus on particular sectors, regions or countries. Equity funds entail slightly higher risk than other types of funds but can also generate better returns  The overall performance of an investment compared to the capital you as an investor have invested in it..
• Bond funds  A bond is a security that generates interest for investors. In addition to entitlement to payment of the agreed interest, bond holders – the creditors – also have the right to repayment of their capital. A government bond is issued by a state. The state, the Swiss Confederation for example, is the issuer of the bond and therefore also the debtor. invest primarily in corporate and government bonds. There are also bonds for more cautious investors as well as those wishing to assume more risk. However, bonds with a good rating  Ratings sind «Bewertungen», um die Qualität von Emittenten, also Herausgebern von Wertpapieren (Staaten, Unternehmen oder Banken) oder die Wertpapiere selbst (z. B. bei Fonds), abbilden zu können. Anhand von festgelegten Kriterien bewerten unabhängige Ratingagenturen die Bonität, also die Kreditwürdigkeit, der Schuldner. Das Rating gibt den Investoren somit Auskunft über die Wahrscheinlichkeit, dass ein Emittent das erhaltene Kapital zurückzahlen und die entsprechenden Zinsen bezahlen kann. are particularly well suited to more careful investors.
• Asset allocation funds  A fund is a “pot” into which investors put money. This is invested by the fund management in various securities, such as shares or bonds, based on certain criteria. This means good diversification can be achieved even with a low level of investment. There are various types of funds: if a fund invests in shares, it is called an equity fund. Real estate funds invest in property. invest in shares and bonds which are sometimes supplemented with commodities and real estate. Investment in different investment classes spreads the risk even more widely. 
• Real estate funds  Plots of land and buildings are referred to as real estate. Residential accommodation includes single-family homes, apartments or entire residential complexes. Shops, warehouses, hotels and factories are classified as commercial property. invest in real estate companies, housing developments, other real estate funds or plots of land. This means investors can gain a foothold in the real estate market even with small amounts of money.
  
• Hedge funds  Hedge funds are funds that come with greater risks than traditional funds and as such promise higher returns. To this end, they often make use of derivatives and short sales. Hedge funds are primarily an investment tool for institutional investors such as insurance companies, pension funds and banks.invest in an even wider array of specialized investment products and sometimes carry out short sales which can generate profit even when prices are falling. When investing in hedge funds it is vitally important to understand what the fund manager’s investment strategy is and what fees are charged. Investors then have to decide for themselves whether this will enable them to achieve positive performance.
  

The various types of funds can also be managed actively or passively. Here are the differences:

Active and passive funds

• Active funds are actively managed by their fund managers  A fund is a “pot” into which investors put money. This is invested by the fund management in various securities, such as shares or bonds, based on certain criteria. This means good diversification can be achieved even with a low level of investment. There are various types of funds: if a fund invests in shares, it is called an equity fund. Real estate funds invest in property., i.e. more of certain equities or bonds are purchased. The objective is to exceed the performance of a particular index  An index is a basket of various securities selected according to particular criteria. It reflects the performance of this selection’s prices and documents them. An index also serves as a comparative value.. However, this is not always achieved. Active funds can nevertheless enable you to generate the same return with lower risk than the index in some cases.
• Passive funds precisely track a selected index, such as the Swiss Market Index (SMI) in Switzerland. This precise tracking is known as passive investment. The fund’s performance is therefore almost identical to that of the index. There are no charges associated with the index, but fees are incurred for the investment in passive funds. Well-known examples in this group are exchange-traded funds  An exchange traded fund (ETF) is usually managed passively. This means it tracks the performance of a pre-defined index, such as the SMI. Like shares, ETFs can be traded on the stock exchange. (ETFs), which are usually managed passively.