Investing in 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.

ETF stands for exchange-traded fund. An ETF is a type of fund that holds a basket of underlying investments, with the aim of tracking a particular index, stock market or commodity, such as the FTSE 100, S&P 500 or physical gold.

ETFs can be bought and sold on a stock exchange, just like listed company shares, and because they include multiple assets, they provide a more diversified way to invest than buying shares in a single company.

Investment trusts are a type of fund set up as a public limited company (PLC), meaning their shares can be bought and sold in the exact same way as a company’s share. Investment trusts have fund managers who invest in various assets, like property, bonds or company shares, depending on their objective and strategy.

Using the CMC Invest app you can place the buy and sell order for a Mutual Fund whenever you want, at any time. However, Mutual Funds are priced once a day and the dealing in Mutual Funds are different to ETFs. For more information read our article here.

Both options offer a simple way to diversify. But, while an ETF tracks the performance of a stock index, region, trend, or theme, the performance of an Investment Trust is based on how the portfolio of assets and its investment strategy are managed.

We don’t charge commission per trade for investments in ETFs or investment trusts, as with all investments available through our app. The 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). You’ll find a link to view the KID or KIID on the asset screen, 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.

When investing in ETFs, UK stamp duty and the PTM levy don’t apply. However, UK stamp duty (0.5% on buy orders) and PTM levy (£1 charge for trade values greater than £10,000) will apply for investment trusts.

If a currency conversion is required for your trade, then the standard 0.5% additional spread will be applied to the exchange rate.

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.

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.

1. Find a company or fund that you want to set up an alert for

2. Tap the bell icon at the top right

3. Enter a price

4. Tap ‘Confirm’ to create price alert

You’ll need push notifications enabled for you to receive price alerts.

To manage your price alerts, tap the bell icon on the top right when viewing a stock or fund with an alert set up. From here, you’ll have two options, you can either create a new price alert or tap the delete icon next to an existing price alert.