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What you will learn
- Distinguish company shares from units in a fund.
- Calculate a simplified fund-unit value from assets and the number of units.
- Explain why the same starting amount can produce different outcomes in two holdings.
Start by identifying who holds each asset
In this model, the fund holds 100 shares in company A and 50 in company B. You hold ten fund units, rather than a directly registered holding of ten shares in each company. Put the fund and companies on different rows. The fund’s own information is needed to understand the assets your units follow.
Assume 1,000 identical fund units, no liabilities, no cash and no fees. No units are issued or redeemed between observations. This is a calculation model of an equity fund; real funds may have other assets, costs and terms. The word fund alone does not describe its composition or establish what it owns.
If the table does not fit, scroll it sideways.
| Item | Calculation | Value |
|---|---|---|
| Company A | 100 shares × SEK 10 | SEK 1,000 |
| Company B | 50 shares × SEK 20 | SEK 1,000 |
| Fund net assets | 1,000 + 1,000 | SEK 2,000 |
| Value per fund unit | 2,000 / 1,000 | SEK 2 |
| Your ten units | 10 × 2 | SEK 20 |
The fund unit follows the model’s underlying assets
A’s next price is SEK 8 while B remains at SEK 20. The fund’s A holding is now worth SEK 800 and its B holding SEK 1,000. Net assets total SEK 1,800. Each fund unit is worth SEK 1.80, so your ten units are worth SEK 18. The change from SEK 20 is −10 percent.
As a separate alternative, the same initial SEK 20 could have bought two directly held A shares at SEK 10 each. They are later worth SEK 16, a decrease of 20 percent. The other holding changes the fund model’s outcome in this particular scenario. It does not prove every fund always loses less than every individual share.
Multiple holdings still need investigation
Two assets form a deliberately small teaching model, rather than a suggested fund portfolio. Several holdings can move in the same direction, and a concentrated fund can follow a narrow part of the market. Read the holdings, strategy, costs and risk description before explaining what a particular fund represents.
Also distinguish the fund’s total net assets from the value of your own units. Here the fund is worth SEK 1,800, but you follow only ten of its 1,000 units: one percent. This calculation does not give you direct votes for one percent of every underlying company. The different ownership levels must stay visible.
Practise ownership and value without mixing products
Draw three boxes: you, the fund and the companies. Put each quantity in the appropriate box and check which total forms the denominator. Your share of this fund model is ten divided by a thousand. The companies’ own total share counts are absent, so direct ownership percentages in them cannot be calculated from the fund table.
Investiq’s portfolio guide helps distinguish holdings and cash in stock exercises. This fund example is independent teaching material and does not establish fund trading or fund data in the app. Continue with the share explanation and diversification lesson if the difference between a quantity and a value still needs practice.
Try it yourself
Another fictional fund has net assets of SEK 1,500 and 300 identical units. You follow six units. What are the value per unit, your holding value and your share of the fund? If net assets become SEK 1,650 with the same unit count, what is your new value?
Show the solution and explanation
Each unit is initially worth SEK 5. Your six units are worth SEK 30 and represent 2 percent of the fund. The new value is SEK 33.
1,500 / 300 = 5; 6 × 5 = 30; 6 / 300 × 100 = 2. Later, value per unit is 1,650 / 300 = SEK 5.50, making six units worth SEK 33. No costs or unit-count changes are included.
Check your understanding
Is a fund unit the same as a direct company share in every underlying holding?
No. Keep the fund unit and the fund’s underlying assets on separate levels.
Is every fund automatically broadly diversified?
No. Holdings and concentration need checking; the product type does not establish that alone.
Practise with virtual money
Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.
How the practice portfolio worksKeep learning and practising
More lessons on this topic
Funds, bonds and ownership
- What is an index fund? Separate the fund from the index it tracks
- What is an ETF? Market price and fund value in a worked example
- Shares and corporate bonds: company ownership versus a debt claim
- A and B share classes: calculate ownership and voting percentages separately
- Listings and IPOs: new shares, existing shares and who receives the money
Sources and examples
- Finansinspektionen: fund holdings and risk (Swedish)
- Investor.gov: fund units, strategies and pricing
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
