The assets of an individual fund consist of different financial instruments (shares, bonds, money, etc.) of different issuers (companies, countries, etc.). Adequate diversification of investments provides investors with high investment security, as the impact of one unprofitable investment on the fund's assets is generally rather small.
The operations of an individual asset management company are supervised by the competent regulators (in the Republic of Slovenia, the Securities Market Agency), the custodian banks of the umbrella fund and independent auditors, which ensures a high level of security for investors. In addition, the assets of the fund are separate from the assets of the management company.
In the mutual fund, individual investments, industries and macro and microeconomic data are monitored on a daily basis by highly qualified experts, who also make decisions for you when to buy / sell an individual investment.
It is important not to equate investing in individual shares with investing in mutual funds.
If we are investing in an individual share, we need to monitor the company's operations, all the news and events related to it, and at certain times make a decision whether to sell the investment or not. We need a lot of time and knowledge for all this. In addition, the risk in this case is significantly higher because our assets depend entirely on the operations of one company. By investing in just one share, we can also lose the entire investment.