Please remember, investment value can go up or down and you could get back less than you invest.
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.