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What are the types of investment funds?

Investment funds are the method used to provide funds for a group of investors by keeping their securities, and each investor retains ownership of his securities, and the investment fund contributes to providing a group of various investment opportunities, and investment funds are also known as a pool of money shared It is owned by a group of investors, and it is managed by specialists in the field of financial investment, who make decisions to buy or sell a group of securities, such as bonds and stocks, which contributes to the diversity of private ownership in each shareholder of the investment fund.

Characteristics of investment funds:

Mutual funds are among the most popular investment options among people. Because it provides many advantages, the most important of which are:

  •  Professional management: it is providing investment funds with a group of managers who are looking for the best investment methods for securities, and they monitor the performance of investment funds.

  •  Diversity: is the ability to invest in the securities of a group of companies and institutions, which contributes to reducing the risk in the event of bankruptcy or loss of a company.

  • Liquidity: It is providing the ability to sell private shares to investors in the event that any investor needs to obtain financial liquidity.

Types of investment funds:

Where there are a group of types of investment funds, each of which has a role in the stock market, and the following information about them, including:

Equity funds:

 They are funds that rely on the circulation of investments in general away from any ownership of companies within the private sector, and these investment funds are the most volatile and changeable; As their value continues to rise and fall within a short period of time, and historically, the performance of equity funds is the best among other types of investment funds; This is because stock trading depends on the future results of companies within their market share, which includes an increase in their revenues and profits.

Fixed income funds:

They are investment funds called bond funds, and they invest in private debts in public and private sector companies. In order to provide income based on the distribution of profits, and usually these funds contain an investment portfolio that enhances financial returns for the investor; By providing him with a steady income when equity funds lose their value in the financial market.

Financial Market Funds:

They are funds with a low risk ratio compared to other investment funds, and these funds are limited to high-quality investments, which are often short-term and issued by the government or local companies.

Balanced funds:

These are funds that aim to provide a balanced mixture of safety (with little risk), capital, and income. Balanced investment funds also rely on implementing an investment strategy in stocks and fixed income, while a typical balanced fund contains 60% of stocks and 40% of Fixed income, but it is possible to achieve the balance at the maximum or minimum value of the assets.

 International Funds:

They are investment funds also known as global funds or foreign funds, and are often used by investors who invest their money outside their countries of origin, and these funds depend on the application of investments in all parts of the world, and they often suffer from difficulty in classifying their own funds. It is possible that they are more dangerous or have a higher safety ratio than are private funds for local investments. Because it tends to be more variable due to many factors such as political influences.

Specialized funds:

 It is considered one of the most comprehensive mutual funds. Because they contain more than one class of securities, most of which are considered popular, but these funds dispense with the diversification of categories within the economic sector, but rather target funds belonging to specific economic sectors, such as health, money and technology, which increase the likelihood of making profits.