Easily buy investment funds

An investment fund is a financial product that pools money from multiple investors. A fund manager then uses this capital to invest in assets such as shares, bonds or other financial instruments. In return, investors receive shares of the fund, providing exposure to the assets held in the fund’s portfolio.

Investment funds typically hold a diversified mix of assets. This means that when you invest in a fund, you automatically gain exposure to multiple companies or securities at once. The fund manager determines the composition of the portfolio and makes investment decisions on behalf of investors.

The main difference lies in how the product is traded:

• Traditional investment funds (open-end funds): Orders are executed once per day at the fund’s net asset value (NAV), which is calculated after the market closes.
• ETFs (exchange-traded funds): Trade throughout the day on a stock exchange, similar to shares. Investors can use market, limit or stop orders during trading hours.

In terms of management, many traditional investment funds are actively managed, while many ETFs are passively managed and track an index. However, both active and passive strategies exist in both structures.

Because of active management and operational structure, traditional investment funds often have higher ongoing costs than many ETFs, but this can vary per product.

There are many different types of investment funds. Common categories include:

• Equity funds: Invest primarily in shares of listed companies, often focused on a region, sector or theme.
• Bond funds: Invest in corporate, government or semi-government bonds.
• Mixed funds: Combine shares and bonds within one portfolio.
• Index funds: Aim to follow the performance of a specific index.
• Hedge funds: Often invest in a broad range of instruments and derivatives.

Funds may focus on specific themes, such as emerging markets or specific geographical regions. The available funds depend on the fund house and product offering.

Investment funds are typically actively managed, and this management comes at a cost. Ongoing charges are included in the price of the fund and generally range between 0.5% and 2.0% per year. These costs can impact your overall returns.

The exact costs are stated in the fund’s KIID or KID and Prospectus, which are available on the platform.

In addition to the intrinsic fund costs, we charge transaction costs and a service fee for buying and selling funds. You can find a full overview on our Fees page.

To invest in funds, you need a DEGIRO account. On our platform, you can access a wide range of investment funds from various fund houses.

Basic investment funds are available by default. To trade in standard funds, you must first pass an appropriateness test to confirm that you understand the product and the associated risks.

Once your account is set up and you have access to the relevant fund category, you can search for a fund via the ‘Investment funds’ menu and place your order.

Investing in investment funds can be beneficial, but it is not without risk. The level of risk varies depending on the type of fund and its underlying assets.

Key risks to consider include:

• Market risk: If the market or sector in which the fund invests declines, the value of the fund may decrease.
• Diversification risk: Although funds often spread investments across multiple assets, this does not eliminate risk. If a fund is concentrated in a specific region or sector, volatility may be higher.
• Liquidity risk: Most investment funds are traded once per day, and some even less frequently. Orders often need to be submitted before a specific cut-off time.
• Emerging markets risk: Funds investing in emerging markets may be affected by political or economic instability.
• Cost impact: Ongoing management fees can reduce overall returns over time.

The risk indicator in the KID or KIID rates funds on a scale from 1 (lowest risk) to 7 (highest risk). Before investing in funds, it is important to fully understand how these products work and the risks involved. Consider your knowledge and experience when making investment decisions. Carefully consider your risk appetite before investing.