What different types of funds are there?

Equity Funds

Equity funds invest primarily in equities, i.e. in shares in listed companies. Shares are tangible assets that can also protect against inflation. Anyone who acquires fund shares becomes a co-owner of the various companies in which the fund invests. While some funds invest in equities around the world, others focus on specific topics, industries or countries. They generate their earnings through share price increases and dividends. Over longer periods, equity funds are among the most profitable types of funds; however, fluctuations in value are also comparatively high.

Bond Funds

Bond funds invest in interest-bearing securities such as corporate bonds and souvereign bonds. They set different priorities regarading regions, exhibitors, currencies or maturities. The most important income components are interest payments and price gains.

Balanced Funds

Balanced funds combine various investments, such as equities and bonds or money market instruments. This enables them to react flexibly to different market situations. Depending on whether the fund strives for safety or opportunity, it focuses more on fixed income or equity.

Open-ended Real Estate Funds

Open-ended real estate funds usually invest in commercial properties such as office buildings, shopping centres, logistics and hotel buildings at home or abroad. Some funds have a focus on specific countries or regions, some also specialise in residential buildings. Their performance depends on how high the rental income is and how the value of the buildings evolves. Special holding periods and return rules apply to open-ended real estate funds

Exchange Traded Funds (ETFs) / Index Funds

In the case of ETFs, no fund manager selects the investments; instead, they track an index such as the DAX, TecDAX or MSCI World. Their performance therefore corresponds almost exactly to that of the index depicted. There are different methods of replication: most funds buy the securities contained in the index (physical or replicating replication). Some artificially track the performance of the index, e.g. through the contractual 'exchange' of performance and income of securities (synthetic replication). Investors can buy many ETFs on the stock exchange and trade them daily.

Money Market Funds