Equity Funds invest in company shares - also known as equities or stocks - which are listed on stock exchanges. The UK Fund, as the name suggests, invests in UK companies, while the Global Equity Fund invests in companies outside the UK.
The value of a company's shares can rise or fall, depending on the performance of the company. If you were to invest only in one company, you would be vulnerable to how it performed and, worse case scenario, if it went out of business you could lose everything.
By bringing a 'basket' of shares together, the UK Equity Tracker Fund spreads the risks and the rewards across all the companies that make up the FTSE all share index. So, if one company under performs, it's possible that another company will outperform to offset this. Similarly, the Global Equity Tracker Fund invests across a number of overseas companies.
Of course, shares can still be a risky investment and future returns are never guaranteed, but the Equity Tracker Funds give a recognised approach for reducing the risk.
It's your decision whether you are prepared to accept this risk, in return for potentially better returns than investments in the other categories.
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