Diversify with Mutual Funds

Mutual funds are an investment that pools your money together with money from many other investors. Fund managers then invest the money in a wide range of investments, depending on the mutual fund’s objective, investment strategy, and policy.

Funds are popular with investors as they offer easy access to a ready-made investment portfolio, run by an expert in their field (the fund manager). This takes away much of the pressure of choosing and managing your own individual investments, while providing diversification benefits to your portfolio.

Actively managed mutual funds are run by a fund manager and team of analysts. They choose the fund’s investments, making changes as needed to keep the fund performing as well as possible. These funds aim to outperform broader markets and other competing funds, although there are no guarantees.

Passively managed mutual funds, also known as 'tracker funds', take a different approach. Rather than trying to do better than the market, they track an index representing it, so their performance is tied to the ups and downs of the market they're following. Both types have their advantages. With no active manager or analysts to pay for, passive funds usually have lower fees, but there’s also little potential for outperforming the market.

Mutual Funds are available with our Plus and Premium plans. We don’t charge commission for individual deals in mutual funds, as with all investments available through our app.

The mutual funds themselves usually have their own management fees and you can find details about these in the key information document (KID) or the key investor information document (KIID). Links to these can be found when viewing a particular mutual fund, and again on the order review screen. The fund manager will deduct these fees from the assets within the fund and you can find details of these fees in the ‘Annual Cost Disclosure’, provided to you after each tax year. In rare cases, mutual funds also have an entry fee, exit fee or performance fee. You can find full details of these charges in the KID or KIID.

UK stamp duty and PTM levy don’t apply to mutual funds.

Mutual Funds usually offer two different class types, ‘income’ (distributing) and ‘accumulation’. With ‘income’ units, any income earned by the mutual fund (like dividends from companies or interest from bonds) is distributed or paid out to you.

With ‘accumulation’ units, the income is automatically reinvested in the mutual fund. You don’t receive an income payment – instead the income will be reflected in the unit price of the accumulation class.

When viewing a Mutual Fund you’re interested in, scroll to the bottom of the ‘Overview’ tab to see the different versions or classes available.

- First find the mutual fund you want to invest in via the ‘Discover’ tab, then choose the mutual fund class, and make sure you’ve read the KID/KIID before continuing

- Tap the 'Buy' button

- Enter the amount you want to invest

- Tap the ‘Review order’ button and check you’re happy with your order details

- Tap ‘Place buy fund order’ when you’re ready

- You’ll then see an order confirmation screen, including details on how your order will be processed

You can view the details and status of your order under the ‘Pending orders’ tab within your account. Once your order has been executed, we’ll send you a contract note with all the details.

We will be continuing to add more Mutual Funds over time, however, if there are any specifically you would like us to add, please send us a secure message by going to the home screen in the app and tapping the envelope at the top right of your screen. You can also call us on +44 (0)20 3003 8303.