Standard Life Investments

Equities

What are they?

‘Equities’ are simply another term for shares. The investor has a share in the ownership of a limited company listed on a stock exchange. Investors choose equity investment in the hope that the value of their shares will increase over time, providing long-term capital growth. There’s also the potential to receive an income stream in the form of dividend payments.

Risk and reward

Over the long term, equities have generally delivered better returns than other types of investments. However, as with any investment, owning shares in a company comes with a risk. Stock market volatility, where the value of a company’s share price responds to a variety of factors, such as company news (good or bad), economic conditions and market sentiment, means equities are unlikely to be suitable for risk-averse investors. And if a company goes out of business, its shareholders could lose all their investment – they are the last in line to receive any payout when the company’s asset are sold off. That said, if you’re prepared to invest your money for the long-term, a well-diversified portfolio of equities can offer a very attractive rate of return.

The benefits of equity funds

If you don’t have the time or expertise to invest in your own portfolio of shares, choosing an equity fund from a professional fund manager makes good sense. The manager invests in the shares of a broad range of companies on your behalf. This increases your exposure to different parts of the market, lessening the risk associated with any one particular shareholding.

As a leading equity manager, we’ve designed a range of funds to meet your needs.