Single-security fund

A single-security fund is an investment fund that invests directly in individual securities – typically shares, bonds or other financial instruments. It only invests to a lesser extent in other funds, as is the case with a fund of funds. This means that the fund managers select and manage the securities themselves. Single-security funds can offer broad diversification if they contain many securities. However, diversification is lower than with funds of funds, which invest in several funds.

Single-security funds are subject to legal requirements such as the 40/10 rule: each individual position may account for a maximum of 10% of the fund's assets. All individual positions that are each greater than 5% of the fund's assets may account for a maximum of 40% of the fund's assets in total.