The investment fund is a type of collected investment. Confidence usually contains a set of investments (such as stocks, although there are many different types of confidence). Its shares are traded in the stock market.

Therefore, someone can invest in the investment fund simply by buying their shares (or even one class) in the market.

Such an approach can be very profitable but not always well. This depends, as with any class, specifically What Buy the investor and How much is the price? They pay for it.

Here, though, there are a few reasons that make the money in the investment fund a good idea for at least some investors.

1. Professional administration

Several funds employ professionals who make decisions on how to customize money. Legendary fund managers such as Jim Slater have achieved excellent returns for their investors.

There are star managers in each generation that can be good even in bad markets. However, there is a lot of evidence that many professional investment managers cannot even overcome the market on a continuous basis.

However, I see the attractiveness of expert managers in some investment funds. Confidence of the Scottish mortgage investment (LSE: SMT) has increased by 21 % in the past five years, which has led to poor performance FTSE 100 index. More than 10 years, though, the Scottish mortgage has ended 291 %.

This reflects the focus of its strong managers on growth companies like Timing and Nafidia.

2. Mobility in international markets more easily

I will feel comfortable evaluating Tesla or Nafidia myself as an investor. They publish information for investors in English.

However, the purchase of American stocks can include direct complications that do not necessarily arise when purchasing shares in an investment box in London that owns such stocks. American tax rules are an example of British investors – and can be a headache.

What if my goal is not the United States, but, for example, Japan or Argentina?

From linguistic challenges to various accounting practices, investment abroad can be a minefield. I think professional fund managers specializing in a specific market are likely to understand better than I do.

3. Diversification with a limited budget

The important risk management tool for any investor is diversification.

With a small budget it can be difficult, as it can add fees for dealing with minimal.

But one share of Scottish mortgage currently costs slightly more than 10 pounds. This in turn provides an effective diversification of shareholders thanks to the Trust investment holdings in approximately 50 different companies based in countries including the United Kingdom, the United States, China, Taiwan, France and Canada.

4. Access to unlikely companies

One of those companies is Spacex. In fact, it is the largest contract in the Scottish Mortgage portfolio at the present time, which represents 7.8 % of the total fund.

Spacex is a private company, so it is not easy to invest in it directly. It is unlikely to be a small private investor with a few hundred pounds for investment able to buy SpaceX shares.

Often, though, this investor can acquire exposure to such companies that are not listed by placing money in the investment fund that has a share.

5. Some boxes sell a discount

Some stocks sell a discount on the sum of the parts. This applies to investment funds as well.

For example, the Scottish mortgage share price is currently being sold by a discount of about 10 % to the net asset value.