Do you want to invest some of your savings, but you don't feel like investing in individual shares? Then you can check out the funds I mention in this article.
Saving in mutual funds and index funds is a good choice for building wealth over time. You are taking part in the growth in the world, and thus the return on the stock exchange, which historically has given strong long-term returns.
Okay, but which fund should I choose, you might ask?
There are many different funds out there and it can be difficult to know where to start. In this article, I highlight three different funds with different strategies, which may suit your investing strategy.
Combined, these funds can also be a tremendous trio, but that's something you must decide for yourself after reading the article.
And I MUST mention this, so there is no doubt: this content is not investment advice, but only intended as information, so that you can become wiser about what is available from different fund types and thus make well-considered decisions.
3 funds for different investment strategies
- DNB Global Indeks A - Stable and predictable performance with a good historical return
- JEPI – an index-tracking ETF for monthly passive income
- First Veritas – quality companies that beat the index
Further in this article you can read more about the various funds. Which suits your investment strategy best?
Get started with investing at Nordnet
I recommend Nordnet because of their large selection of shares and funds, low fees, good learning resources + free access to the share forum Shareville (ad).
Advantages of funds vs individual shares
A fund is simply explained as a basket consisting of many companies, and this means that you take a lower risk than if you invest in individual shares. You are well diversified, since the basket consists of several companies. This means that the risk is reduced if one of the companies in the fund were to encounter challenges.
The vast majority of people will in any case get a higher return from investing in an index fund than with individual shares. And this actually also applies to index funds vs active funds. According to this article, 80 percent of all active funds underperformed against index funds in 2021.
In short, funds are for you who do not want to spend time and energy learning about companies, but still want to take part in the stock market's returns, while individual shares are for you who have a burning interest, time and desire to learn about the stock market.
You can read more about index funds vs active mutual funds in this article I have written.
Okay, let's now take a closer look at three different funds that suit different investment strategies:
1. DNB Global Index A – for the passive investor
If you want a fund that can show good returns, low costs and just forget about it, DNB Global Indeks A is the fund you should take a closer look at. This is the fund for you who want not to think too much about your investments, but still take part in the growth in the world and the return on the stock market.
The DNB Global index has had an average annual return of almost 15 per cent over the past 10 years. This is a very good return!
The fund is passively managed, which means that no fund managers operate and trade frequently, reducing management costs.
Does this fund seem interesting? Then you must be careful to choose the right fund here. DNB has two funds that are very similar: DNB Global Indeks A and DNB Global A. But the difference is that DNB Global A has higher management costs, which over time can eat up your return significantly.
Press the button below, and you will get to the right fund - i.e. the fund with low costs. You will come to Nordnet's share platform, which I believe is the best platform for new investors.
2. JEPI – for large monthly dividends
Do you want to build passive income and can take a little higher risk than a global index fund? Then you can consider JM Morgan Equity Premium Income ETF – 'JEPI'.
JEPI is an actively managed fund that invests in large US companies. This fund is an ETF, which means that it is traded on the stock exchange. JEPI is managed by JP Morgan, and aims to provide the same results as an ordinary index fund - but with a large monthly dividend payment as well.
The monthly dividends are the main reason why many people like JEPI.
This is a fund with a direct return of around 10 per cent, which means that if you invest, for example, $10,000, you will receive approx. $1,000 in dividends spread over the 12 months of the year (around $80 in your pockets each month). In addition, you can gain value by the fund's price rising on the stock exchange.
The dividend comes straight to your investment account, and you can choose to reinvest the money yourself or use it for other things. In other words, JEPI is a solid opportunity to build high passive income, especially if you reinvest the money. Then you get a snowball effect, where the next dividend is even slightly higher than the previous one, from month to month.
But remember that JEPI is in dollars, and you therefore take part in fluctuations in the dollar exchange rate as well, for better or for worse. You can also consider the joint-stock fund Fondfinans Utbytte if you are based in Norway, but this fund does not pay out the dividends - rather, they reinvest the dividends for you.
Press the button below to buy JEPI at Nordnet.
3. First Veritas – quality companies that beat the index
If you want to take a slightly higher risk than a global index fund, you can invest in an actively managed fund. There are a number of actively managed funds out there - some are good, while many underperform.
If I were to recommend an active fund that you could consider in more detail, I would look at First Veritas, which is managed by Thomas Nielsen.
Which companies get a place in First Veritas is decided using a mathematical model developed by Nielsen itself. Nielsen belongs to the side of investors who call themselves quality investors. Quality investors look for companies that have had stable, increasing top and bottom line growth, high return on capital, little debt and lots of cash on the books.
This is a fund that gives you the opportunity to beat the index, if that's something you want to try. And the possibility of this increases especially in the long term.
The fund has so far crushed the benchmark index, as you can see in the picture above. It is then appropriate to emphasize that such a fund can fluctuate more than index funds, and that the results from year to year can be more volatile.
Nielsen's model uses several parameters to measure quality, where only companies that meet these parameters are relevant for the fund.
I give the fund an additional thumbs up because he is very transparent with his investments - both those that have gone well and those that have gone badly.
Click the button below and invest in First Veritas at Nordnet.
So, which fund should I choose?
You have now been presented with three quite different funds, each with its own advantages and disadvantages.
In short:
- If you want to do as little as possible, I recommend that you create a fixed savings agreement in DNB Global Index A.
- If you want to build passive income, you can JEPI be something to consider in more detail.
- If you want the possibility of a higher return than the index, an active fund such as First Veritas could be the fund for you.
Also read: Fond eller aksjer – hva skal jeg velge?
Get started with investing at Nordnet
I recommend Nordnet because of their large selection of shares and funds, low fees, good learning resources + free access to the share forum Shareville (ad).
Disclaimer
Funds, like individual shares, have a risk that you will lose your money. The content of this article should not be regarded as concrete investment advice, but only as information about different types of funds.
