Within the fund companies, fund managers are employed to manage the money entrusted. In this area, however, administration means that the money is invested strategically and thus as profitable as possible. In fact, there is always a certain risk that investors have to take. Nevertheless, the managers of the funds must comply with the law. This means that they have to comply with legal requirements and investment guidelines. These vary, of course, depending on the type of fund.
In order to minimise the risk to the investor, risk diversification strategies are needed. This minimizes the risk of loss by dividing the plant among a wide range of assets. The law stipulates that a maximum of five percent of total fixed assets will migrate to issuers. These issuers usually represent securities. In exceptional cases, a maximum of 10 can also be put into a system.
The related investment guidelines and investment objectives are precisely defined when a fund is set up with the investor. These then relate exclusively to the fund and the investor knows exactly what happens to his money. The investment focus is often already visible from sales brochures. Often you can already see by the name of the fund what the focus is on.