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Investment funds for beginners: how to choose an investment fund that works for you
Beginner investors can use funds to start building their portfolio, making it easy to access global trends while managing their risk level. Here are six funds for beginner investors to consider.
Investing seems complex when you first start, but picking the right investment funds for beginners can make it much more straightforward, and give you an easy on-ramp to building your wealth over the long term.
“Investing is a measured and long-term process,” says Rob Morgan, chief investment analyst at Charles Stanley. “It involves taking risk but doing so in a way that minimises and mitigates it, to more reliably harness the growth available across global economies and individual companies.”
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Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
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Investment funds are a particularly good option for beginners because they offer a convenient way to manage the level of risk you’re taking. Investing in a fund spreads your money, and therefore your risk, across dozens of different companies.
There are funds for almost any type of investment, from sustainable funds that can grow your wealth while making a positive impact, to AI funds that track the world’s most cutting-edge technology.
Each has its advantages and disadvantages. But the simplest and most relevant for beginner investors are ETFs.
An ETF is a fund that trades as a single share on a stock exchange. Its price changes while stock markets are open in line with changes in the price of the assets it tracks. You can buy and sell it in a stocks and shares ISA, just as if it was a stock.
There are ETFs for almost everything, but beginners might be particularly interested in ETF index funds. These track a specific index, such as the UK’s FTSE 100 or the US’s S&P 500.
“If you’re not sure which companies you wish to own, you may want to consider a tracker fund, or an ETF,” says Claire Exley, head of advice and guidance at J.P. Morgan Personal Investing. “These will allow you to hold a small amount of, for example, every company listed in the FTSE 100.”
Best of all, they usually outperform more active stock-picking strategies. AJ Bell’s December 2025 Manager versus Machine report found that only 20% of actively-managed funds (IE, those where the manager decides when to buy and sell stocks, rather than just tracking an index) outperformed a passive alternative over the last five years.
Three types of investment funds for beginners to consider
If you are drawing up a shortlist of the first funds to add to your investment portfolio, investment platform AJ Bell breaks the available fund universe down into three categories in terms of the kinds of investments they make.
Global equity tracker funds
Funds that track the global stock market are a great way to get started in investing without having to decide on any specific region or industry.
“These funds provide low-cost exposure to companies around the world, with representation from a wide range of sectors,” said Dan Coatsworth, head of markets at AJ Bell.
Four of the best-known global equities (another word for ‘stocks’) indices are MSCI World, MSCI All Country World, FTSE World and FTSE Developed World. Tracker funds following these indices should register the same price movements (or very close to them) over any given timeframe.
Some of the most popular global stock tracker funds on AJ Bell’s platform are:
Source: AJ Bell, based on net flows from 13 April 2025 to 12 April 2026
Global bond tracker funds
If you’re looking for a more cautious approach to getting started in investment funds, you could look at bond funds instead.
“When shares fall, bonds often fall less and recover faster, helping to smooth the overall investment journey,” said Coatsworth. “That might suit someone in their 40s or early 50s approaching retirement, those already in retirement, or more anxious individuals.”
There are typically three types of bond that bond funds invest in – corporate bonds, government bonds (such as gilts) or a combination of the two (these are known as strategic bond funds).
Some popular bond funds for beginner investors on AJ Bell are:
Source: AJ Bell, based on net flows from 13 April 2025 to 12 April 2026.
Multi-asset funds
Most portfolios combine bonds and equities, as well as other types of asset. You can do this yourself by buying funds specialising in different investments, but a more convenient approach is to buy a multi-asset fund which acts as a self-contained portfolio in its own right.
“The more cautious you are, the greater the proportion you might want in bonds,” said Coatsworth. “However, there’s such a thing as being too cautious. Those with time to ride out the ups and downs of the stock market might want to avoid having too much in bonds as a proportion of their overall portfolio given the returns might be much lower than a more equity-weighted portfolio.”
Six funds for beginners
With input from Charles Stanley’s Morgan, we’ve picked out six investment funds for beginners, which we’ve shared below.
Fidelity Index World
Risk level: medium-high
A low-cost, cheap tracker fund is a great starting point to gain exposure to a market or sector, giving you convenient ownership of all or most of the companies that make up that market’s index.
Fidelity Index World is a good fund for beginners to consider because it provides a convenient tracker for the global stock market.
Personal Assets Trust
Risk level: medium-low
Personal Assets Trust (LON:PNL) is a multi-asset investment trust that sets out primarily to avoid losing money in inflation-adjusted terms (making it a less risky investment compared to funds that are more concerned with growing wealth than preserving it).
The portfolio comprises four main asset types: equities, bonds, cash and gold.
This has proved a resilient combination. The returns from each of these asset classes tend to rise and fall independently of one another, meaning that it can hold up even in changing market conditions.
Vanguard LifeStrategy Funds
Risk level: variable
The advantage of this multi-asset fund range is that it has several different funds, each with a different risk profile, so investors can select the one that best suits them.
Interactive Investor includes three in its quick-start fund range for beginner investors: 20% Equity, 60% Equity and 80% Equity, though the full range also includes 40% and 100% equity options. The remainder of the portfolio is invested in bonds.
As a rule of thumb, the higher the percentage of equities, the higher the risk profile, and the higher the potential returns.
Royal London Short Term Money Market Fund
Risk level: low
Money market funds invest your money as if it was cash, but they tend to generate returns just above the Bank of England base rate.
Interactive Investor includes Royal London’s Short Term Money Market Fund in its quick-start range, and characterises it as very low risk. This is a very cautious option: your investment is very unlikely to fall in value with a money market fund, but it’s also unlikely to grow much beyond inflation.
M&G Global Dividend
Risk level: medium-high
Dividends are the payments that companies make to their shareholders. Ultimately, it is dividend payments – or the expectation of future dividend payments – that gives shares their value.
M&G Global Dividend harnesses the power of dividend stocks, with a global perspective. It holds a wide variety of companies and could be of particular interest to investors seeking a rising income from their investments.
Scottish Mortgage
Risk level: high
Scottish Mortgage (LON:SMT) is one of the best-known investment trusts for innovation-led growth investing.
Morgan believes that anyone taking a long-term approach to investing should consider investing in a fund that looks for long-term growth through technological innovation. Their long-term perspective ought to let them ride out short-term volatility and reap the long-term rewards.
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
