Not everyone needs to know about investments. To properly multiply your savings, you need to have a lot of knowledge and experience. If we do not know what and how to invest our money, better entrust them to specialists. There is a high probability that they will know what to do to improve the state of our finances. If we want to multiply our savings with the help of specialists, it is best to put money into an investment fund. It is with their help that we can increase our financial resources. The specialists in the financial world employed in them know exactly what to do to ensure that fund customers are satisfied and that they make the most profits.

Investment funds are interesting because they take into account the propensity to risk people who pay their money to them. So they can put money into them, those who are willing to risk the hope that they have achieved a higher profit, as well as those who prefer stable, not very high profits, but they are sure that the money paid into the funds will certainly return to them. For we can never be sure exactly whether the fund we choose will bring us profit. There is always a risk that people responsible for managing our money will misinterpret the situation on the financial market and make the wrong choices, which may cause our money or part of us to get lost. This is the investment risk that we always face.

Below we present the division of investment funds, precisely because of the risk of losing our capital.

Below we present the division of investment funds, precisely because of the risk of losing our capital.

Equity funds – as their name suggests, they invest the money entrusted to them in shares. Therefore, they are at very high risk. For it is never quite clear what the actions of companies that the investment fund will have in its portfolio will behave. We often come across equity funds that invest a lot of money in the purchase of shares of companies from one sector of the economy, eg from the energy, information technology or modern technologies. It is commonly said that equity funds are for young people because they are a long-term investment. It is commonly said that in the long run, there is a higher probability that they will bring profit.

Hybrid Funds – funds of this type, invest in various types of securities. We include shares, bank deposits, bonds or currencies. As you can see, these are investment products with a different degree of risk. In this group, we can distinguish two types of funds:

– stable growth funds – invest primarily in shares and securities. However, investments in shares may not exceed 40% of assets that are in possession of funds. The remaining part of the money should be allocated for the purchase of more secure financial instruments.

– balanced funds – they invest in a similar way as stable growth funds, however the number of shares in the portfolio is slightly larger and ranges from 40 to 60%. You can achieve higher profits thanks to this, however there is also a greater risk of losing money.

It is said that the minimum time to invest in this type of funds is 5 years, so it is a medium-term investment.

Debt securities funds – these are funds that invest most of their funds in debt securities, which give you the opportunity to earn regular income. Their share in the investment portfolio should be at least 66%. The Treasury bonds, Treasury bills, bonds issued by private companies, bonds issued by local governments are the most frequently bought ones. They are considered safe and therefore can be a short-term investment.

Cash and money market funds – they owe their name to the instruments they invest in. They are usually bank deposits or instruments whose maturity does not exceed one year. We include debt instruments issued by the State Treasury, the National Bank of Poland or some international institutions to which Poland is a member. These funds are very safe, but they do not give us the opportunity to earn high profits.

We can also divide investment funds due to “openness” to their clients. Therefore, we distinguish here:

Open-end investment fund (FIO) – participation in such a fund can be bought by virtually everyone. We can buy any number of these units, at any time, and at any time we can sell these units.

Specialist open investment fund (SFIO) – it is similar to an open-end investment fund, however, in the fund’s statute there is a certain group of investors who can buy units, as well as conditions to be met in order to acquire them.

Closed-end investment fund (FIZ) – funds of this type issue investment certificates. They may be registered or bearer. Usually, the number of participants in such funds is limited. They can be like shares, in other words by subscription.

Let’s also see what the distribution of funds looks like due to the geographic location of investments:

National market fund – the dominant part of the assets of the funds is invested in securities of institutions established in Poland.

Foreign markets fund – the majority of assets is invested in securities of entities whose registered office is outside our country.

Fund without specific geographical specialization – such funds do not have specific geographic preferences when buying investment securities.

Based on the information provided earlier, we can conclude that there are a lot of different types of investment funds in our country. So if we have free financial resources that we would like to multiply, and we do not know how to do it, it may be worth trusting one of the investment funds and buying participation units. However, we must be aware that there is no guarantee that the funds invested will return to us, because each investment is more or less risky.