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How to invest in funds

Investing in funds

Find out what funds are and how to invest
Important information - Our Vantage Service is designed for investors who want to make their own investment decisions without personal advice. If you are unsure of the suitability of an investment for your circumstances please contact us for advice. Investments will fall as well as rise in value so you could get back less than you invest. Tax rules can change and benefits depend on individual circumstances. Once held in a pension money is not usually accessible until age 55 (57 from 2028).

What is a fund?

A fund is an investment that pools together money from lots of individuals. The fund manager then invests the money in a wide range of assets e.g. UK shares, overseas shares, bonds etc. Each investor is issued units, which represent a portion of the holdings of a fund.

Different funds specialise in different sectors - for example, if you're interested in Europe you could invest in a fund that focuses on Europe. See our most popular fund sectors.

Example fund
UK shares: 46%
Overseas shares: 24%
Corporate Bonds: 15%
Property: 7%
Funds: 5%
Other: 3%

Why invest in funds?

Fund managers choose and manages underlying investments

Benefit from the expertise, knowledge and time spent by the fund manager and their team researching and picking the best opportunities in a chosen sector.

Diversifying

Investing in funds means your money is spread across multiple assets. As some investments will perform better and some worse over time, diversifying will, in theory, help spread the risk and smooth returns over time.

Investing for the long term

We always recommend investing for at least 5 years - you have a better chance of riding out short term volatility and benefitting from greater returns.

Guide to Investing in Funds

David and Lee
David Smith and Lee Gardhouse, Fund Managers

Getting started

Getting started

Getting started is easy, whether you already have an account with us or are new to HL. If you're new you can open an account first and choose your funds later. Or, you can start by building your fund portfolio and then opening an account to hold it in. Invest from as little as £25 a month or with a £100 lump sum.

Choose funds

Whether you want a ready-made portfolio, to build your own portfolio or choose from our list of favourite funds we can help you.

Open an account

Choose from our range of award-winning accounts. Simply open an account and choose your funds straight away, or invest at a later date.

Manage your account

Access a wide range of powerful, easy-to-use tools to help you manage your account and improve your fund dealing.

Portfolio+

Ready-made portfolios

Our ready-made options are simple, transparent and expertly managed

Leave it to an expert

Wealth 150+

Need a helping hand?

Ideas to help you get started plus example portfolios you can tailor to your needs

Help choosing funds

Investment ideas

Our favourite funds

A list of what we believe to be the best funds available to UK investors

View Wealth 150+

Stocks & Shares ISA

Shelter £20,000 from tax, with access when you need - choose from ready-made investments, do-it-yourself or get a little help from our experts.

Open an ISA

More on ISAs

Fund & Share Account

Build your fund and share portfolio with our flexible investment account. Free fund dealing and online share dealing from £5.95 to £11.95 per trade.

Open an account

More on dealing accounts

Personal Pension (SIPP)

Make more of your pension with our low-cost, award-winning account, wide investment choice, and expert research.

Open a SIPP

More on pensions

watchlist

View and manage your portfolio wherever you are, whenever you want, with our free App for smartphone and tablets.

Download your free App
watchlist

Created with like-minded clients, helping you deal with any question you might have with your account, investments or other queries.

View help & support
watchlist

Stay up to date with our expert fund & share research so you can make informed investment decisions.

View fund research
watchlist

Keep track of existing and potential investments all in one place.

Create your own watchlist
watchlist

Make it easier to manage your family's portfolios. View them in one place, using a single set of login details.

More about linked accounts
watchlist

Display the holdings in your portfolio the way you want, in the order you want.

More about customisable display

Why hold funds with Hargreaves Lansdown?

  • Choose from over 2,500 funds

    Whether you're an experienced investor, just starting or want to leave it to an expert, you'll be able to find the right funds, with over 2,500 funds to choose from.

    Search our list of funds

  • Expert fund research

    Our experienced research team's knowledge and insight is available to you with regular research updates. Sign up to alerts to keep you up-to-date with the latest insight.

    Read our fund research

  • No charge to buy or sell funds

    Most fund trades cost absolutely nothing and usually confirmed by the next working day. We also have an automated low cost income reinvestment service.

    See our charges

  • Invest from £100 or just £25 per month

    Pay in on a monthly basis from £25 a month. You can choose to invest in funds, FTSE 350 shares or eligible investment trusts, or hold the money as cash until you choose what to do with it.

    More about regular savings

Frequently asked questions


  • The type of unit you hold determines how any income generated from the fund's underlying investments is treated.

    With income units, income is paid out to fund holders as cash. This could provide the investor with an income stream or the cash could be reinvested to buy additional units.

    With accumulation units income is retained within the fund and reinvested, increasing the price of the units. Generally, for investors who wish to reinvest income, accumulation units offer a more convenient and cost-effective way of doing so.


  • In the past most investors who held funds, such as unit trusts and OEICs, paid a single ongoing charge to the manager of their chosen funds. This charge often included an element of commission which the fund manager shared with brokers, such as Hargreaves Lansdown, to help pay for their service. We call these funds 'inclusive' funds.

    Changes to FCA rules now mean that when investors purchase a fund any commission must be rebated to the investor. Fund management groups have launched versions of their funds with lower ongoing charges, which do not include any commission. We call these funds 'unbundled' funds.


  • You can buy funds online, over the telephone or by post. Please ensure you have read the fund's Key Investor Information Document (KIID) or Key Features first which is available from the individual fund factsheets on the website.

    Online: If you're registered for online access, simply log in and select the relevant account, such as Vantage ISA or SIPP and click the ‘Deal Now’ button. Search for your chosen fund investment and continue to the confirmation page.

    If you're not already registered but have a Master Password, you can register for online access by selecting the ‘Register’ tab at the top right of the screen.

    Telephone: Provided you have a Master Password, you can call our stockbrokers on 0117 980 9800 Monday - Friday: 8am - 9pm.

    Post: Download a dealing form from our Useful forms section and return it to: Hargreaves Lansdown, One College Square South, Anchor Road, Bristol, BS1 5HL.

    Hargreaves Lansdown do not charge a dealing commission to buy or sell funds.


  • Funds fall into two main categories – unit trusts and open-ended investment companies (OEICs). They share many characteristics, for example both are normally priced once per day. The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.

    Unit trusts and OEICs are both ‘open-ended’, which, normally speaking, means that if more investors are buying units than selling, the manager ‘creates’ new units. If the opposite is true, the manager ‘cancels’ units in the fund.

    Unit trusts and OEICs can differ in the way prices are displayed, and the way charges and discounts operate.

    Guide to Fund Prices, Savings and Yields