Buyers' Guide - Investment Funds

With savings rates being so low more people are thinking of investing in shares. And for most, that means putting their money into a fund but wiith thousands to choose from it's worth doing some research before you invest. Let Moneywise help with our Buyers' Guide.

Investing in shares can be a great way to grow your money - especially when savings rates are so low.

But buying shares direct is high risk if you're a novice and don't have enough cash to buy a decent spread.

That makes investment funds a safer option for most investors. These work by pooling your money with that of other investors to buy up a range of different company shares chosen by the manager.

The value of your investment will rise and fall, like the stockmarket, so the most important thing is to choose a fund that matches your appetite for risk.

There's always talk of stellar returns in emerging markets like Brazil, Russia or China. But investing here is high risk.

For more typical investors, funds that invest in big firms listed in the UK or a broad spread of global companies are a good starting point.

More cautious investors might prefer funds that invest in a combination of corporate bonds, shares and cash.

Watch out for charges which can make a dent in your return.

Online fund supermarkets are a good way of cutting these costs, but while they'll offer tools to help you make your choice you can't get tailored advice - for that you'll have to speak to an IFA.

Finally investing isn't about getting overnight returns. If you'll lose sleep at the prospect of losing money, or you'll need access to it in the next five years, it's best to suffer low rates and stick with cash.