Your fund and ETFs

From the moment you open your Investment Pot and start investing, it’s over to the fund manager to look after the fund you’ve chosen. 

Your fund manager is BlackRock. They’re one of the world’s largest fund managers, so you know your money’s in expert hands. Their aim is to help your fund grow in value over at least 5 years, taking a certain level of risk to do so. Learn more about what a fund is and the difference between risk and return in our investing essentials course.

BlackRock decides where to invest to achieve the fund’s aim. So you don’t need to do a thing. All the hard work’s done for you.

But you may still be wondering more about your fund and where it's invested. Well, we’ve got the answers…

Once you add your money to the fund (whether that’s Careful, Balanced or Adventurous), BlackRock then invests that money into other funds that they manage. Many of these other funds are called ETFs (which stands for ‘exchange-traded funds’). 

An ETF is a group of investments – such as stocks and bonds that can be bought or sold on the stock market – bundled together into a single investment. 

The aim of many ETFs is to try to track the performance of a specific index. 

An index is a defined group of different investments, made up of things like shares, bonds and more. There are all sorts of indices out there covering various industries and regions. And a fund which tracks an index aims to rise and fall in value in the same way as the investments in that index do. 

An index you might know... FTSE 100 – This index features the 100 largest UK companies by market value that trade on the London Stock Exchange. If you invest in a fund that tracks the FTSE 100, your money’s investing in those 100 big companies in a way that matches the proportion of them in the FTSE 100 index – and it’s doing this through a single investment.

They invest in lots of things at once

With an ETF, rather than investing in a single company, you’re investing in a group of 100s or 1000s of companies that trade on stock markets – all through one investment. 

Investing in such a wide range of things is known as diversification – and it’s a smart way to invest. Your investment is exposed to lots of underlying investments, and doesn’t depend on any one thing doing well for your overall investment to make you a return.

A cost-effective way to invest

Investing in every single asset in a given index would be pretty tricky, and probably 

very expensive. With an ETF, you can invest in multiple companies at once, which can be a more cost effective way to invest. 

You’re investing with experts

iShares is the fund provider for the ETFs and index funds that make up your fund (be it Careful, Balanced or Adventurous). They’re part of the BlackRock family. And they’ve been providing ETFs for over 20 years – so it’s their bag.

It’s true that you don’t need to understand the ins and outs of the stock market or know which ETFs to choose. The experts do all that hard work by managing your fund for you.

But we also want you to have an idea of what’s happening when you’re investing. And by growing your investing know-how, you can make more informed decisions about your money.

The value of your investments could go up or down and you could get back less than you put in. This isn’t financial advice. If you’d like some, it’s best to speak to a financial adviser. 

iShares® and BlackRock® are trademarks of BlackRock, used under licence. BlackRock has no obligation or liability in connection with any product or service offered by Monzo.

The information on this website is Monzo’s. BlackRock isn't responsible or liable for it, and BlackRock don’t guarantee it’s accurate, complete or reliable.

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