Funds are usually divided into equity funds, fixed income funds, balanced funds and alternative funds. In addition, funds can be actively or passively managed. Find out what kind of funds these are and who they are suitable for.
In addition to being classified by type, funds can be divided into passive or active funds based on their investment policy. Nordea’s selection also includes Enhanced funds that combine some of the characteristics of both passive and active funds.
Passive funds track a certain market index, aiming to generate the same return. For example, the MSCI World Index reflects the performance of the developed equity markets. The costs of passive funds are typically low because the portfolio manager does not pick the investments actively, which means less time is spent on managing the fund than with an active fund.
In active funds, the portfolio manager aims to actively track the markets and to pick stocks for the portfolio that they believe will outperform the benchmark index. Active funds usually have higher costs than passive funds because their management is more time-consuming. Discover Nordea’s funds
Nordea’s Enhanced funds combine some of the characteristics of passive and active funds. Nordea’s Enhanced funds aim to generate a higher return than the benchmark index at a fairly low cost. Just like passive index funds, our Enhanced funds invest in the companies included in a certain index. That being said, the Enhanced funds are not index funds because they aim to outperform the index by applying small changes to the weights of individual stocks in the benchmark index. However, the portfolio manager makes stock picks fairly infrequently compared to actively managed funds. For this reason, the management costs of Enhanced funds are relatively low. Discover our Enhanced funds
Alternative funds usually invest in assets that are not listed on an exchange. These include forest properties, commodities, unlisted shares or real estate properties. These investments are usually illiquid, which means selling them may take more time than selling stock exchange listed equities.
Alternative funds are typically open to subscriptions and redemptions at specified times, for example once a month. Alternative funds are usually best suited for long-term investment and their value is partially determined by different factors than those affecting equity or fixed income funds. These funds can give you some additional diversification in your portfolio, as long as they fit your investment plan. You should therefore select your funds carefully and remember to read the prospectuses and terms and conditions of the funds that you are interested in.
The information provided on this website is intended as general product information only and does not constitute investment advice or recommendations. When it comes to funds or equities, past performance is not a guarantee of future results. The value of fund units or equities may increase or decrease due to market movements, and it is not certain that you will get back the entire amount you invested.
.svg)
