Investing Explained: What are Funds?
JAMES STAFFORD
13.08.2025
What Are Investment Funds?
In our new series, we take a deep dive into the terminology surrounding investing. In this article, Cantor Fitzgerald Ireland's Business Development Associate, James Stafford, takes a look at what Funds are and how they work.
What Are Investment Funds?
Investment funds pool money from multiple investors to create a diversified portfolio managed by professionals. They offer an easy way to invest across markets and asset classes without having to pick individual securities e.g. stocks or bonds. This can make them a popular tool for building long-term wealth.
Why choose Funds?
Funds simplify investing by offering diversification, transparency, liquidity, and cost efficiency. Another benefit is flexibility. Funds allow you to start investing with a small initial amount and gradually increase your contributions over time. They can be used in pension plans, savings strategies, or income-focused portfolios.
Whether you seek growth, income, or exposure to specific sectors such as Defence or themes such as Sustainability, there is likely a fund out there to match your objectives.
Types of Funds Available
Based on asset class:
| Equity Funds | Invest primarily in stocks. |
| Bond (Fixed-Income) Funds | Invest in government or corporate bonds for regular income. |
| Money Market Funds | Invest in short-term, low-risk instruments (e.g.treasury bills). |
| Multi-Asset Funds | Mix of stocks, bonds, and other assets. Balance between growth and income. |
| Commodity Funds | Invest in physical commodities like gold, oil, or agricultural goods. |
| Real Estate Investment Funds (REITs) | Invest in property or real estate-related assets. |
Based on investment strategy:
| Index/Passive Funds | Track a specific market index (e.g. S&P 500). Passive, low-cost. |
| Actively Managed Funds | Fund managers actively select investments to outperform a pre-defined benchmark. |
| Thematic/Sector Funds | Focus on specific industries (e.g. technology, defence, renewable energy). |
| Style Funds | Focus on specific investment styles such as value or growth |
Different fund structures:
| Investment Funds (Open-Ended) | Buy/sell at Net Asset Value (NAV) price at the end of each day, using a single price. |
| Exchange-Traded Funds (ETFs) | Trade on stock exchanges like shares, track indexes or sectors, with generally lower fees. |
| Closed-End Funds | Fixed number of shares traded on exchanges. Prices may trade above or below NAV. |
| Unit Trusts | Pooled investments with fund units sold to investors. Bid-ask dual prices. |
There are also alternative funds, such as hedge funds, private equity, venture capital, and infrastructure funds, as well as regionally focused funds that invest in domestic, international, regional, or emerging markets.
Are Funds Right for You?
Funds suit a wide range of investors. Whether you are new to investing, building a pension, or managing wealth in retirement, funds can play a key role. Funds will typically have varying performance track records, risk exposures, charging structures and tax treatments, therefore due diligence is important prior to selection.
At Cantor Fitzgerald Ireland, we aim to make investing easier by carefully researching and selecting what we consider to be best-in-class funds. These are then incorporated into our professionally managed Discretionary Optimum strategies, managed on your behalf.
Manage Risk by Diversifing across funds
While funds offer built-in diversification, they are not risk-free. The value of a fund can fall as well as rise, depending on the performance of its underlying assets. Market volatility, interest rates, currency movements, and economic conditions all affect fund returns. That said, fund managers can use a variety of tools to manage risk, including asset allocation, hedging, and active decision-making.
Spreading investments across different fund types, regions, and asset classes further helps reduce overall risk and smooth out returns over time.
A Smarter Way to Invest
Cantor Fitzgerald Ireland offers professionally managed Optimum Discretionary Strategies, tailored to your goals, risk tolerance, and sustainability preferences. Our dedicated team handles the day-to-day investment decisions while keeping you informed through regular updates, freeing up your time, to focus on what matters most.
Contact us to learn how our strategies can help grow and protect your wealth.
Written by James Stafford, Business Development Associate, Cantor Fitzgerald Ireland