This module covers the following key topics:
- The concept of mutual funds and ETFs (Exchange Traded Funds): how these investment vehicles work, their main advantages, and potential drawbacks.
- Types of funds based on asset classes: equity funds, bond funds, and balanced funds β characteristics of each type and their typical uses.
- The principle of diversification β the idea of spreading capital across different assets to reduce risk, commonly known as βDonβt put all your eggs in one basket.β
- Passive investment strategies, especially index funds, their features, advantages compared to active management, and how they help reduce costs and improve portfolio efficiency.
This module provides a comprehensive understanding of how investment funds operate and the principles of diversification, enabling investors to build a balanced portfolio and make informed investment decisions.