Equities are shares issued by a public limited company and traded on the stock market. When you invest in a fund, the fund buys shares in a company on your behalf. .
Equities have the potential to make you money in two ways: you can receive capital growth through increases in the share price, and you can receive income in the form of dividends. Neither is guaranteed and there is always the risk that the share price will fall below the level at which you invested.
Direct investment in a single company can be risky, as you are reliant on just one company to perform well, so buying equities through an investment fund spreads the risk.
This is because equity funds generally invest across a range of various countries, regions, industries and investment styles as a way of diversifying, or spreading risk.
Over time, a fund which invests mostly in equities is likely to offer greater potential for higher returns but with it comes greater changes in value. This is because equities are volatile in nature meaning their value can rise and fall quickly. While they carry the greatest risk, they may provide the greatest return over the long-term (ten years or more).
See our Equity funds