Funds
I invest
in mutual funds
A free securities account, no unnecessary fees, and
a wide range of mutual funds. You’re in control!
Enjoy €0 entry*
and exit fees
At MeDirect, you invest in mutual funds with almost 100 partners without entry* and exit fees! Why? Because nothing should come between your money and its potential growth.
*MeDirect Bank SA does not charge any commission on the subscription of a mutual fund for its own benefit; however, taxes may apply on redemption. The holding of an investment fund generates charges levied by the fund and the remuneration of the services provided by MeDirect is paid by the subscribed fund through a partial retrocession of its management fee.
Understanding mutual funds
Most of us want our money to do more than sit in a savings account. But building a sensible investment portfolio on your own is hard work: you’d need to pick the right companies, keep an eye on markets, and know when to make changes. That takes expertise, and a good amount of time.
A mutual fund does that job for you.
With a single investment, you get:
- • A portfolio, which can hold hundreds of different companies or other investments
- • A professional team making the day-to-day decisions
- • Access to markets and asset types that would be difficult or expensive to reach on your own
- • The ability to start with a modest amount and add to it over time
In short, a mutual fund is a way to invest without needing to become a full-time investor yourself.
Of course, investing always involves risk, and the value of your investment can fall as well as rise. We’ll come back to that below; it’s just as important as the benefits.
Every mutual fund begins life as an idea.
A professional investment team sets out a strategy: what it intends to invest in, where, why, and how much risk it’s prepared to take to get there. Perhaps the strategy is to own the world’s largest companies. Perhaps it’s to lend to solid European businesses and collect the interest. Perhaps it’s to back the companies building the technology of the next decade.
That strategy is written down, published, and the team must stick to it. It becomes the fund.
Once the fund exists, investors can put money behind it, from a modest first investment to a substantial one. Your money joins everyone else’s and is invested according to that same strategy, in the same proportions, whether you’ve invested €100 or €100,000.
So, the question isn’t really “should I buy a fund?” It’s “which strategy do I want my money working towards?”
What you actually own
When you invest, your money buys units of the fund.
A unit is a slice of the entire portfolio: not of one company, but of everything the fund holds. Buy a single unit of a global equity fund and you own a fraction of hundreds of companies across dozens of countries. If the portfolio grows in value, your slice grows with it. If it falls, your slice falls too.
A fund charges an annual fee for managing your money. You won’t see it leave your account: it’s deducted from the fund’s assets and already reflected in the price of your units. The KID shows the full figure, listed as the ongoing charges, so you can compare like with like before you choose.
Part of that annual fee is passed on to MeDirect by the fund, as payment for the platform, the fund range and the service we provide. It is not an extra charge: it comes out of the fee the fund already charges, and it does not increase what you pay. You will find the exact amount in the cost and charges table information we give you before you invest, and in the cost and charges statement you receive each year.
- There are thousands of funds on the market, which sounds daunting. But they’re all built from a handful of basic choices. If you understand these basics, the whole range becomes navigable.
- And if you’d rather start from a shortlist, the MeDirect Fund Selection narrows more than 1,000 funds on our platform down to fewer than 50, organised into clearly defined categories. At MeDirect we have an open architecture, what it means, is that we do not have funds of our own, and we partner with almost 100 partners to provide you with the best mutual funds available to you.
First: what does the fund invest in?
- This is the biggest decision, because it shapes both your growth potential and how bumpy the journey might be.
- Equity funds buy company shares. Typically, the strongest long-term growth potential, and the largest swings along the way.
- Bond funds lend money to governments and companies in exchange for interest. Generally steadier, with more modest growth potential.
- Multi-asset funds hold a blend of both, mixed to suit a particular appetite for risk, from defensive at the cautious end to dynamic at the adventurous end. A sensible starting point if you’d rather not assemble the mix yourself.
Second: where and how does it invest?
- Within each of those, funds narrow their focus:
CHOICE WHAT IT MEANS COMMON OPTIONS REGION Where in the world the money goes A single market such as the US or Europe, a broader region such as emerging markets, or global for the widest spread INVESTMENT STYLE The kind of company the manager looks for Growth (fast-expanding, innovative businesses), value (companies priced below what the manager believes they’re worth), or quality (financially robust, steady performers) COMPANY SIZE How large those businesses are Large-cap: established household names, typically steadier. Small and mid-cap: smaller businesses with more room to grow, and more volatility - Third: what else is worth knowing?
- Themes. Some funds follow a long-term trend rather than a region or sector: cybersecurity, robotics or clean energy, for example. Focused by design, which makes them more concentrated and usually more volatile.
- Sustainability. If you want your money to reflect environmental, social and governance considerations, look for funds classified under the EU sustainability rules as Article 8 (funds promoting ESG characteristics) or Article 9 (funds with sustainable investment as their explicit objective).
- What happens to the income. Funds collect dividends and interest from their holdings, and you choose what happens next. Accumulation units (Acc) reinvest it automatically. Distribution units (Dist) pay it out as cash on a regular basis, typically monthly, quarterly or yearly depending on the fund.
- Currency. If a fund invests abroad, exchange rates affect what you get back. Hedged units aim to remove that effect, though hedging has a cost of its own, which is reflected in the fund’s charges. Unhedged units leave you exposed to currency movements, which can work for you or against you.
How long should I invest for?
- Investing is a long-term project, markets rise and fall in the short term, and a year or two is rarely enough for a strategy to show what it can do. Most funds are designed with a minimum horizon in mind, often five years or more, and the KID states it clearly under the “recommended holding period” mention. Money you’re likely to need sooner than that is usually better left where you can reach it without worrying about the market.
As with any investment, mutual funds carry risk. Each fund has its own specific risk profile, which you can find on the MeDirect platform.
Below are the risk categories that may apply to a mutual fund. Several risks can apply to one fund.
- • Liquidity risk: The fund may invest in securities that are not easily tradable on a stock exchange or similar market. This could affect the fund’s ability to repay investors.
• Counterparty risk: If a fund counterparty becomes insolvent, it can no longer, or only partially, pay outstanding obligations. When the fund uses derivatives this risk may be amplified.
• Currency risk: The fund can be adversely affected by exchange rate fluctuations.
• Credit risk: The fund can invest in bonds. The issuers of these bonds may become insolvent, thus the value of the bonds may be lost in full or in part. If the bonds are high yield, the risk is higher.
• Derivatives risk:The fund may enter into derivative transactions. The higher profit opportunities thus created are associated with higher risks of loss, which in some cases may be more than you originally invested. The use of such instruments may involve specific liquidity risks, credit risks, counterparty risks, legal risks, valuation risks, operational risks and risks related to the underlying assets.
• Operating risks and custodial risks: The risk of loss resulting from inadequate or failed internal processes, human errors, incorrect valuation and safekeeping of assets, systems, or external parties (such as brokers). There is a risk of loss associated with holding assets in custody, especially abroad. This risk may result from insolvency, negligence or misconduct on the part of the Custodian or a sub-custodian.
• Emerging market risk: The fund will be more volatile because these markets are typically smaller, less liquid and more sensitive to economic and political factors.
• Interest Rate Risk: The value of the bonds and therefore the fund generally falls when interest rates rise.
Specific risks are always outlined in the Key Information Document and on the product page on the MeDirect website for each fund, this is a non-exhaustive list of categorised risks.
Beyond the professional management of the portfolio, three things happen quietly in the background, and both matter.
- • A fund spreads your money across many holdings, and depending on their strategy, across sectors and countries too. If one holding disappoints, it is one position among hundreds rather than the whole of what you own. This doesn’t protect you if markets fall as a whole, but it does mean your investment isn’t resting on a single name.
- • All of our funds available on our platform are UCITS funds, a European standard written specifically to protect ordinary investors. It sets rules on how widely a fund must spread its investments, what it has to tell you, and how your assets are held separately and safeguarded.
- • Your units are priced regularly. Each fund calculates a Net Asset Value, or NAV: the total value of everything it owns, divided by the number of units in issue. This is usually worked out every business day, so you can always see what your investment is worth. Additionally, every fund publishes a Key Information Document (KID). It’s a short, standardised summary of what the fund invests in, what it costs, and how risky it is. It’s the first thing worth reading before you invest, and it’s written to be read.
The main distinction comes down to how they are managed and the associated costs:
Feature | Mutual Funds | ETFs (Exchange-Traded Funds) |
Management Style | Active: experts actively buy and sell to try and outperform the market. | Passive and active: algorithms generally track a specific index to match the market. |
Cost Structure | Typically, higher management fees due to the active expert involvement. | Typically, lower fees since they are not actively managed. |
Years ago, we eliminated entry* and exit fees on mutual funds. Why? Because nothing should stand between your money and its potential growth.
As an investor at MeDirect, you can enjoy the following benefits:
- A free securities account. Nothing to pay to open it or hold it.
- No entry or exit fees on mutual funds.*
- Genuine open architecture. We don’t run any funds of our own, so we have no in-house range to push. We choose from across the market on the merits, which is why you’ll find funds from nearly 100 different fund houses on our platform.
- MeSolo, our investment platform. Built to make searching and investing in funds straightforward.
- The MeDirect Fund Selection, a shortlist assembled by our specialists, and a useful starting point if the full range feels overwhelming.
*MeDirect Bank SA does not charge any commission on the subscription of a mutual fund for its own benefit; however, taxes may apply on redemption. The holding of an investment fund generates charges levied by the fund, and the remuneration of the services provided by MeDirect is paid by the subscribed fund through a partial retrocession of its management fee.
Ready to start?
Open a MeDirect account if you are not yet a client, then open your free securities account, MeSolo. Once there, you can take a look at the MeDirect Fund Selection and read the Key Information Document of any fund that interests you. If you would prefer a ready-made portfolio spread across several funds, many clients begin with an Investment Plan.
Explore our Mutual funds offerings
Funds from almost 100 partners
We don’t limit ourselves to a set amount of in-house funds! On our platform, we have funds from almost 100 partners we trust across the world, so you can choose the ones that fit you best.