With equity funds, the fund assets are invested primarily in stocks. Equity funds are as varied as the stock markets themselves. The investment possibilities range from globally investing equity funds to funds that only invest in stocks from certain countries or sectors.
Bond funds invest primarily in debt. Bonds usually offer regular interest payments and the redemption of the invested capital at the end of the term, though funds generally do not hold bonds all the way to their maturity.
Bond funds with short remaining term to maturity
These funds invest in bonds or money market instruments with short maturities.
Funds that invest in different asset classes (for example in equities and in bonds) combine the growth potential of stocks with the lower risk of interest-bearing securities. The so-called mixed funds usually give the fund managers more investment leeway. When stock prices are stagnating or falling, for example, fund managers can shift capital into interest-bearing securities, or when stocks are performing well, move more capital into these assets.