An equity fund is a diversified investment in the equity market. A long-term investment, equity funds are suitable for you if you are seeking a high return that is better than the return of fixed income markets and are willing to accept the return fluctuations of the equity market.
Equity funds invest mainly in equities and are most suitable as a long-term investment in place of or alongside direct investments in equities. The funds spread their assets over several investments, which minimises risks. You do not need to monitor the different investments, as this is done on your behalf by investment professionals who are constantly monitoring the performance of the markets and funds.
- You can choose from different types of funds investing in different markets.
- Managing your investment is easy since you do not have to personally follow the markets.
- You can buy and sell fund units at any time.
Diversification minimises risk
Equity funds differ from each other in terms of risk level, so please read each fund's investment policy carefully. The more diversely a fund invests its assets in different sectors and companies operating in different countries, the less value fluctuation the fund is expected to experience.
Wide range of equity funds
Nordea's selection includes various equity funds that choose their investments according to their investment policies. The selection includes funds investing in the equities of a certain country or continent and funds investing in a certain sector or companies of a certain size.
A fund may invest its assets in large, stable companies or in small and medium-sized companies. Nordea has funds that invest in the forestry, pharmaceutical and technology industries.
In addition, equity funds provide access to special markets and sectors that are suitable as supplements to a portfolio. A fund may also select its investments based on the principles of responsible investment. Each fund's selection criteria for its investments, or investment policy, is outlined in the key investor information document (simplified fund prospectus) and the fund's rules.
Returns from the equity markets
The value of equity fund units tracks the performance of the equity markets. In the case of funds investing in a specific sector, the value of fund units follows the performance of equities in the sector in question.
A rise or fall in the prices of equities impacts the value of fund units. The risk, however, is minimised through the diversification of investments over several assets, and many funds provide diversification over different sectors and market areas. The risk level is therefore lower than with investments in individual equities.
The performance of an equity fund is usually compared to the benchmark index, which is selected based on the type of the fund's investments. For example, the benchmark index can be the equity or sector-specific index of the target country.
Investments made outside the eurozone are also exposed to an exchange rate risk.
The value of fund units may increase or decrease depending on the market situation. The investor may lose a part or all of the invested capital.
The funds are managed by Nordea Funds Ltd.
A subscription fee is charged on a subscription (purchase) for fund units and a redemption fee on a redemption (sale) of fund units. You can subscribe for fund units for a reduced fee via Netbank.
Each fund pays the fund management company a management fee, which covers such fund management costs as value calculation, accounting and reporting.
The amount of the management fee is given as an annual fee. The management fee is deducted in the calculation of the daily net asset value per fund unit, and is thus not charged separately. The fee includes a custody fee for fund units.
No subscription fees will be charged from Nordea's Key and Check-in Customers who save regularly in Nordea funds in accordance with a fund savings agreement concluded at a branch or via Netbank. Preferred Customers receive a 50% discount on subscription fees.
You can view the fees for each fund in the Funds Now service.
Read each fund's investment policy, risks and costs in the key investor information document, rules and official prospectus before making your investment decision.
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