The difference between fund and equity investments
Both funds and equities offer good returns in the long term. So what’s the difference? You can compare this decision with buying a cake versus buying the ingredients and baking the cake yourself.
Investing in a fund is like buying a cake in this case. When you invest in a fund, the management company has selected a range of equities the fund invests in on your behalf. It’s a convenient solution if you don’t want to spend a lot of time managing your investments and prefer to have the fund manager make the investment decisions for you.
An equity represents the investor’s stake in an individual company. When you invest in equities, you need to create your own portfolio to diversify your risks. Therefore investing in equities requires a little more knowledge and a keener focus than investing in funds.