Funds vs Strategies
What is the difference between a fund and a strategy?
How funds work:
When you buy a fund, you are investing in a pre-packaged basket of stocks and/or bonds and other assets typically chosen by an investment manager. Every investor in the fund gets a slice of this portfolio. Popular types of funds include:
- Mutual Funds: Investors can buy or sell shares of the fund at the fund’s current net asset value (NAV).
- Closed-ended Funds: The fund issues a fixed number of shares that trade on a stock exchange, so prices can fluctuate based on supply and demand.
- Exchange-Traded Funds (ETFs): Similar to mutual funds but traded like stocks on exchanges.
A fund allows you to benefit from a fund manager’s expertise, to spread risk across different assets, and access markets that might be difficult to reach on your own. However, funds are typically a one-size-fits-all approach as they can’t be tailored to your investment style or goals. They offer a hands-off approach to investing, which can be convenient.
If you invest in multiple funds, it is worth checking what each one holds. Many funds include the same big names, think Apple, Amazon, Shell, which can reduce true diversification. Understanding a fund’s composition helps ensure your investments are sufficiently balanced.
How a personalised strategy works
When you create an investment strategy, you are setting a plan for how your money will be invested based on your goals, risk tolerance, and other investment preferences. A strategy can be fully customised, giving you control over which types of assets to include, how much risk to take, and when to buy or sell.
A popular type of strategy is Momentum Investing. This is a systematic investment strategy that focuses on assets that are trending upwards in price, with the idea that they will continue to rise in the short term. Investors following a momentum strategy buy “winners” and may sell when momentum fades.
A strategy is dynamic and will update automatically based on evolving market data and conditions, rather than based on decisions made by an investment manager. It provides control and automation, letting you remain hands free while it handles trade execution.
Why Stratiphy?
At Stratiphy, we believe you shouldn’t have to choose between convenience and control. We make it easy to:
- Build a personalised investment strategy in seconds.
- Automate regular top-ups.
- Receive transparent clear insights into holdings and performance.
- Align your investments with your values and work towards your long-term goals.
With Stratiphy, you can invest like the professionals do, and in a way that’s affordable, accessible, and built around you.
