Investing in Funds is One of the Safest Ways to Protect Your Money |

The Stock market and share market are ideally suited for making huge money, but the amount of risk involved in those fields is certainly high. To minimise your risk and to protect your money, consider investing in funds. Though you cannot expect huge returns like stock or shares, you can definitely find good value for your money by investing in funds. Even with a small sum of money, you can protect it using funds. By consulting a professional money manager, you can decide your investment plan. Investing in funds is also a do-it-yourself task if you know the types of funds.Investment trustsInvestment trusts use your money along with the money of other investors to invest all the money across various shares. The best way to protect money while buying shares is to distribute the investment. When you invest in shares on your own, you have to invest at least £1000 a month to protect your investment. But, with investment trusts, you can invest £50 a month and get the same protection and benefits. Using investment trusts, you can expect your investment to grow even if the share price of companies reduces. The reduction in price of some company shares will be compensated by the increase in price of other shares. This policy allows you to invest your money across the globe in an indirect way. Your profits with investment funds depend on the fund manager you choose.Unit trustsBy buying unit trust, you are using your money to buy units in a fund. The value of the assets held by fund managers determines the price of a unit. When investors invest more money in funds, new units are created. The size of unit trust is never restricted and it can increase and decrease according to the demand. Investors buying units will have to pay a price called as offer price and investors selling units pay a different price called as bid price. The difference between these prices is called spread and it determines your profit. As unit trusts cannot be carried worldwide, a variation of unit trusts is now widely used for investing in funds.Investment companies with variable capital (ICVC)Just like unit trusts, you will be buying shares instead of units for investing in funds. These are also open ended and you hold shares of the fund manager. The variable price of unit trusts creates confusion and hence, in ICVC, there is only a single price that makes everything clear. You always know the exact amount you are paying. Using ICVC, it is possible to equate British in-line funds with other country funds.The investment trusts also function by market speculation. Sometimes, the price of the trust may be less than the value of the asset. In that case, the trusts will be sold at a discounted price. When investors find out that the price of these trusts will rise in the future, they will invest more in those trusts. For any type of investment, risks are involved because there is no guarantee that the fund manager will perform without errors. By carefully choosing your suitable investment type, you can reap benefits in the future.