Investing in a fund

Investing through a fund is a simple way to invest in a large number of different things. When you invest your money through a fund, you are ‘teaming up’ with hundreds, or even thousands, of other investors. The investors in a fund hand over the investment decisions to a fund manager, who devises an investment strategy and buys shares and other assets in line with the fund’s investment objective and policy, supported by  their view of the markets.  

Funds make it easy to mix shares in different companies, bonds and other asset types. This reduces the impact of one investment doing poorly on the overall value of your investment. 

Unless you are an experienced investor with a very clear idea of how you want to invest, it is a good idea to talk to an independent financial adviser about your options. Large asset management companies – like BNP Paribas Asset Management – offer a wide range of products covering many different investment strategies, and there is a lot to consider.  

If you have been gifted or inherited units or shares in a fund, it’s also worth talking to a financial adviser before you decide what to do with them. 

You can find an independent financial adviser on unbiased.co.uk. This is a website with national listings of independent financial advisers that can help you find an adviser in your area. 

How much risk you want to take 

Funds offer a spectrum of risk, from relatively stable returns with a lower chance of your investment losing value, to the potential for larger gains but also larger losses. It is important to find your place on this spectrum before you invest. What are your return expectations? How much are you prepared to lose if things go wrong? 

You can find detailed information on a fund’s risk profile in the documents like the key investor information document (KIID). Fund managers are required to provide this information for every fund. 

How much the fund manager charges 

Charges will be an overall drag on your investment return, but this doesn’t mean that cheaper is always better. Low-charging passive funds – which invest automatically according to market movements – will never outperform the overall market. An active fund manager that undertakes in-depth research and market analysis to find the best investments will cost more but could grow money more quickly than the overall market through shrewd investment decisions. 

How the fund has performed historically 

Past performance is not a guide to current or future performance but understanding how a fund has performed in different market conditions and against its rivals can you help you decide if a fund fits your needs. 

The fund manager’s approach to responsible investing 

Many investors today want to make sure that their money is not making the world worse. This can include things like protecting the environment, ensuring companies treat workers and customers fairly and making sure companies they invest in on your behalf are run ethically and efficiently. Many asset management companies now have responsible investment policies you can read to check that they reflect your own beliefs. You can eveninvest in funds with an explicit goal of helping to alleviate environmental or social problems. 

An individual savings account (ISA) is a way to protect a proportion of your savings and investments from UK capital gains and income tax. UK residents who are taxpayers can usually invest up to £20,000 each year through an ISA (as at December 2025), although there are different types of ISA available and your options will depend on your specific circumstances. An ISA is usually offered through an investment manager or bank. 

To find out more about investing in an ISA with BNP Paribas, please refer to our Supplementary Information Document. 

You’ll find more guidance on how to invest in a fund in our FAQs.