Understand how funds work

The objective of funds is to grow your money by investing in a range of different asset classes and geographic territories. There are four main types of assets that a fund will invest in — cash, bonds, equities and property and each carries its own potential risks and level of return.

The fund manager decides which assets the funds should hold, in what quantities and when they should be bought and sold to achieve the fund’s aim.

What is an asset class?

There are four main types of investment, which are often called ‘asset classes’. Each one works in a different way and carries its own particular rewards and risks. It is important to understand how they work before you make any investment decisions.

What is the difference between active and passive funds?

Active funds

Active funds are 'actively' managed by a fund manager, who buys and sells investments on behalf of the fund in order to maximise gains and minimise losses according to the fund's aim.


As the fund is actively managed, the fund managers can strategically react to market situations, taking advantage of insights and opportunities as they happen.

For example, when a particular sector looks like it might be on the up, or one region starts to suffer, the fund manager can move your money either to take advantage of this growth or to protect you from potential losses.

An actively managed fund offers the potential for higher returns than a passive fund, which simply invests in a particular stock market.

We offer a range of actively managed funds through our Zurich Managed Funds and our Zurich Target Date Funds.

Passive funds

Rather than trying to anticipate and identify growth opportunities, passive investment funds simply track a particular stock market, such as the NASDAQ or S&P 500.


Instead of investing in some of the assets in the market, a passive fund will invest in all the assets of a market, to give you a return that reflects how the market is performing in general.

So when the stock market index rises, the value of your fund rises with it. And when the index falls, your investment falls too.

We offer passive funds through our Zurich Risk Profile Fund range.

Understand active and passive funds

What are the benefits of investment funds?

More choice — as part of a group of investors, you can access a wider range of investment opportunities.

You don't have to worry about managing your investment, as the fund manager does this for you.

Can be cheaper than buying investments individually.

You can invest in funds that match the amount of risk you are willing to take.