What is an investment fund?

An investment fund, a collective investment fund or a common investment fund is an instrument that allows savers to access the financial market indirectly through diversified investments.

An investment fund is a collective investment undertaking (CIU) that pools together the capital from a large number of investors with a view to making investments in certain assets, depending on a pre-established strategy. These investors are called shareholders or unitholders and they may be natural persons or legal entities.

Investment funds are managed and represented by a management company working under risk controls to achieve returns for investors by investing in various financial assets.

In exchange for professional management of their investments, investors pay certain fees within certain legally established limits. These fees vary depending on the investment funds and can be found in the prospectus registered with the National Securities Market Commission (CNMV) and in the Key Investor Information Document (KIID), a summary of the vehicle's investment policy and its key characteristics.

The return from investing in an investment fund is allocated to each investor on the basis of the number of their shares or units over the fund's total capital, and will vary depending on the performance of the shares' or units' net asset value.

To protect the investors, the fund's capital is under the custody of a depository, a company with surveillance and guarantee duties.

Find out more about investment funds with our financial training videos or go to Spotify and listen to the episode on our podcast "Santander AM Aprendiendo a Invertir" about investment funds.

For more information about investment funds, go to our website.


You might be interested in