The value of your investment can go up or down, and you may get back less than you invested. Nothing in this article is investment, tax or legal advice. |
A mutual fund - sometimes called an OEIC (Open-Ended Investment Company) or a unit trust - is a professionally managed investment that pools money from many investors to buy a diversified portfolio of assets, such as shares, bonds, or a mix of both.
A single fund can also offer several "share classes" - different versions of the same underlying portfolio, each with its own identifier (ISIN) and appearing as a separate listing in the app.
Mutual funds are available to UK residents only and are being rolled out gradually, so they may not be available to you yet. If you're eligible but don't have access yet, you can join the waitlist in the app and we'll let you know when access becomes available to you.
Where can I find more detail on a fund's structure, objectives and risks?
Before you invest in any fund, you'll be shown its Key Information Document (KID), a short, standardised summary covering the fund's structure, objectives, risks, costs and past performance. See "What documents and statements will I receive?" for full detail on the KID, and "Which mutual funds are available on Trading 212?" for how a fund's holdings and risk level are shown in the app.
How is a mutual fund different from a stock or an ETF?
Unlike a share or an ETF, a mutual fund isn't bought and sold between investors on an exchange. When you invest, new units are created for you; when you sell, your units are cancelled by the fund. There's no live order book or continuous intraday pricing; instead, the fund is valued once a day.
What is NAV?
The Net Asset Value (NAV) is the value of the fund's assets, less its liabilities, divided by the number of units in issue. It's the basis for the price you pay when you buy, or receive when you sell.
Why don't I get the price I see on screen?
Mutual funds use "forward pricing": your order is priced at the next official valuation point after it's accepted, not at the last price shown on screen. See "Why don't I see a live price, and what are the dealing cut-off times?" for more details.
What does "Accumulation" mean?
Accumulation (Acc) share classes automatically reinvest any income the fund generates instead of paying it out to you in cash.
What do "Income" and "Distribution" mean?
Income (Inc) or Distribution (Dist) share classes pay income to you in cash rather than automatically reinvesting it.
What does "Hedged" mean?
A hedged share class aims to reduce the impact of currency movements between the fund's underlying investments and the share class currency. Hedging reduces, but doesn't remove, currency risk.
Why do some share classes look almost identical?
Share classes of the same fund can differ by currency, income treatment or eligible investor type, but look similar by name. The ISIN is the definitive identifier; always check it before assuming two listings are the same.