What different types of funds are there?

Equity Funds

Equity funds invest primarily in equities, i.e. in shares in listed companies. Shares are tangible assets that can also protect against inflation. Anyone who acquires fund shares becomes a co-owner of the various companies in which the fund invests. While some funds invest in equities around the world, others focus on specific topics, industries or countries. They generate their earnings through share price increases and dividends. Over longer periods, equity funds are among the most profitable types of funds; however, fluctuations in value are also comparatively high.

Bond Funds

Bond funds invest in interest-bearing securities such as corporate bonds and souvereign bonds. They set different priorities regarading regions, exhibitors, currencies or maturities. The most important income components are interest payments and price gains.

Balanced Funds

Balanced funds combine various investments, such as equities and bonds or money market instruments. This enables them to react flexibly to different market situations. Depending on whether the fund strives for safety or opportunity, it focuses more on fixed income or equity.

Open-ended property Funds

Open-ended property funds usually invest in commercial properties such as office buildings, shopping centres, logistics and hotel buildings at home or abroad. Some funds have a focus on specific countries or regions. Their performance depends on how high the rental income is and how the value of the buildings evolves. Special holding periods and return rules apply to open-ended property funds.

Exchange Traded Funds (ETFs) / Index Funds

There are various types of exchange-traded funds (ETFs). Most of them replicate the performance of an index, such as the DAX or the MSCI World Index. These funds are referred to as passively managed, since the manager does not make independent investment decisions. Additionally, there are also “active ETFs”, which, for example, invest according to fixed rules, aim to outperform the market, or selectively choose individual shares.

ETFs are continuously traded on the stock exchange. ETCs (Exchange Traded Commodities) and ETNs (Exchange Traded Notes), on the other hand, are comparable to certificates, as they are securitised through a debt instrument.

Money Market Funds

As the name implies, these funds invest in the money market - in fixed-term deposits, fixed-income securities or bank deposits; they also invest in certain high-quality bonds with short maturities and fixed interest rates of up to 13 months. Yields generally correspond to current market interest rates in interbank trading.