Fundss and shares - difference?

Catbells

Can someone please explain the difference between funds and shares investments in the simplest language possible. Thanks.

Lokolo

Funds are a collection of investments in one area.
Shares are individual shares of a company.

A fund would usually be made up of all sorts of different shares.
http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-emerging-markets-accumulation
That is a fund, scroll to the bottom, and you have a list of Top 10 Holdings, these are the top 10 shares in this fund.

Aegis

Funds can also diversify across assets, so they can invest into ETFs, ETCs, property, gilts, bonds, derivatives, warrants, etc. Most of the time they stick to shares and bonds, but there are funds out there with different mandates.

Assuming you mean unit trusts and OEICs when you say "funds", the main differences are:

• Funds trade at the net asset value of their holdings with either an initial charge or a bid-offer spread, while shares trade at whatever the market thinks they are worth (also with a bid-offer spread, but defined by the market rather than the manager);
• Shares are an investment into a single company (highly concentrated) while funds typically invest into 15-150 assets (diversified);
• Shares typically do not have internal charges levied against shareholders, while funds usually have initial and annual charges (which pay for the management team's services).

Hope that helps a little.