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Types of Open-End Fund
Investment Strategy
The variety of sectors
discussed on previous pages provide potential investors with a broad
guide to the fund's investment activity. Within each sector there may
be funds which invest in smaller companies, middle sized companies,
recovery situations, ethical investments, index funds etc.
Ethical Funds
· aim to only
invest in companies or other institutions deemed not to offend the ethical
objective of the particular fund - they vary from the outright "negative
screening" to the merely "socially responsible" depending
on the strength of the ethical stance of the fund
Index-Tracking Funds
· aim to shadow
the performance of a particular stock market index as closely as possible
e.g. the FT-SE 100 Index
· achieved by
replicating the component shares in the index (only if a large fund)
or by sampling or more usually by the use of derivatives