Interactive Investor

Investment fund types

Learn more about the different types of fund we offer.

Expert Tips

Please remember, investment value can go up or down and you could get back less than you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling.


Fund categories

Index tracker funds
Funds which simply follow a market index, such as the FTSE 100. A simple way to gain exposure to major markets. Learn more

Global funds
A simple, convenient way to invest in a wide range of international stocks and shares. Learn more

Equity funds
These funds are invested in a wide range of 'equities', otherwise known as shares. Learn more

ETFs
A low-cost type of fund that is traded throughout the day on stock markets, and usually tracks an index. Learn more

Investment Trusts
A type of investment fund that operates as an individual company, listed on stock exchanges. Learn more

Unit Trusts & OEICs
Learn about the differences between these types of investment fund. Learn more

Accumulation vs income funds
Learn about using funds for accumulation (growth) or income, and why you might choose each option. Learn more


Active vs passive funds

All funds are either active (managed) or passive. It's important to understand the difference when doing your research.

What is an active fund?

Active funds are actively managed to try and beat the market - in other words, achieve the best possible returns. They have a fund manager deciding which investments the fund should include.

Bear in mind that outperforming the market is an aim - it is not guaranteed.

What is a passive fund?

Passive funds are not actively managed. Instead they simply invest in all the companies in a market index (e.g. the FTSE 100). Your returns will depend on how well that market performs. 

Passive funds are also called index funds, tracker funds or exchange-traded funds (ETFs).

They are a low-cost and easy way to access major markets. You can also invest in other investment types, such as commodities.

Of course, some people invest in both - passive funds for the chance of slow and steady returns over the long term, and active funds for the possibility of beating the markets.

Fund ideas from our experts

Need inspiration? Our experts have taken the hassle out of finding funds with a range of carefully selected options.