Whether you’re saving for retirement, a child’s education or your dream holiday, the funds you invest in can make a big difference to how your savings grow.

When choosing funds, it’s important that you understand what your investment needs are. For example you should think about:

  • What do you need from your investment? How much do you need your funds to grow to meet your savings goals or retirement income needs?
  • What is your risk appetite? All investments carry some degree of risk and their value may fall as well as rise.Generally speaking, riskier funds have better long-term growth potential than less risky funds, but also have the potential to both rise and fall by larger amounts. You'll need to work out the balance between risk and growth potential that’s right for you.
  • How long do you have to invest? If you’re investing for the long term (five years or more), you may be more prepared to weather some market ups and downs in the hope of achieving greater long-term returns. But if you need to access your savings in the near future you’re likely to be more concerned about short-term falls.

Once you know your investment needs, the next step is to find the funds that best match those needs. Holding a mix of different investments will also make sure you’re not reliant on the success of one type alone. For example, you might hold a mix of different asset classes (such as shares, bonds, property and cash) or investments from different countries.

Fund factsheets and Key Investor Information Documents explain how each fund works and are a good source of information. Among other things they will tell you:

  • What the fund aims to do and how it is managed
  • What types of investments it holds
  • How it has performed in the past – although please remember that past performance is no guide to future performance.
  • How much the fund costs
  • What its risk rating is

If you’re at all unsure about what to invest in, please seek advice or guidance.

It’s important to remember that, whatever investment you choose, your money is at risk.  The value of your investments may go down as well as up, and you may get back less than you invest.