At Plum, we offer a range of funds. These funds are financial vehicles, often operated by professional money managers. This allows people to contribute their money into a shared pool. The money is then invested in a combined portfolio of shares, bonds, or any other financial instruments 👨👩👧👦
A fund will typically hold a portfolio containing hundreds of different securities at any time, so the risks are spread. The theory is that if one company in the portfolio has a bad quarter, you don't stand to lose a great deal because only a small proportion of your overall investment is tied to that specific company.
Our funds are arranged into themes, such as risk-level (e.g. Balanced) or industry (Tech). Here’s a little more detail on the types of assets that typically make up a fund:
Stocks / Shares
A share is a fraction of a business. The words stocks and shares are often mentioned together or are used interchangeably. But they're a little different.
When a company decides to sell shares it issues stock. An investor can buy or sell shares of that stock. So, shares are just individual units of a company's stock.
Stocks can fluctuate in value, but historically have given higher returns than bonds.
A bond is the investment version of an IOU. When you invest in bonds, you’re effectively lending money to someone (usually a government or business). Bonds will include an agreed interest rate over a set period of time ⏱
Bonds are considered less risky than shares as they are designed to give you your money back (with a specified rate of interest). With shares there is no guaranteed rate of return, and the value of your investment could go down as well as up 📉
The flip-side of this additional security is that the return is capped. Bonds referred to as a "fixed-interest" asset, because the interest rate paid over the period of the bond is set in advance. If you invest in stocks and shares your returns are potentially unlimited… but they could also be -100%!
Where Can I Find More Information on Funds?
When you tap ‘Start Investing’ from the main menu of your app you’ll be presented with an overview of the funds, their holdings, historical returns, and any relevant further details.
You will also find links to the ‘Key Investor Information Documents’ (KIIDS). We strongly recommend that you read these documents in full before deciding to invest in any of our investment funds.
To find the KIIDS:
If you are using iOS tap the icon in the top left and then tap 'Documents'
If you are using Android tap 'You' > Documents