An investment fund is a financial vehicle that pools money from multiple investors and invests it in a diversified portfolio of assets, including stocks, bonds, real estate, businesses, and other financial instruments. The goal is to maximize returns while spreading risk across different investments.
The main types of investment funds include:
- Mutual funds (FCPs) and SICAVs: invest in stocks, bonds, or money market instruments.
- Private equity funds: invest in unlisted companies to support their development or growth.
- Real estate funds (OPCI, SCPI): invest in residential or commercial real estate.
- Hedge funds: employ advanced strategies to generate returns, often with higher risk.
The fund is managed by professionals who make investment decisions on behalf of investors, and each participant receives a share proportional to their investment.
An investment fund is therefore a collective vehicle that provides access to diversified investments, optimizes returns, and reduces risk for individual or institutional investors.