An open-ended investment fund is a diversified portfolio of financial instruments managed by a professional management team. Through diversification the risk associated to the portfolio is significantly lower than the risk associated to each individual instrument.
With a relatively small investment, investors could be part of investments on financial markets otherwise difficult to be accessed by the small investor. The costs associated to investments in funds are reduced in comparison with the costs associated to direct investments on financial markets. In addition, investors in investment funds benefit from the professional management of such funds.
Investors have the possibility to get out from the investment in funds at any point in time, by simply requiring the redemption of their fund units by the fund.