A convenient way to reduce potential volatility even further is to invest in a fund, sometimes called a ‘collective investment scheme’ or ‘investment fund’. Funds pool your money together with that of other investors to create a much bigger ‘pot’. This is then used to invest in a wider range of investments than an individual could achieve. It means that even if you only put in small amounts, your investment will still have the benefits of being widely diversified.Making use of all these ways to diversify can improve the relationship between risk and return, increasing the chances of achieving growth with lower levels of uncertainty. By carefully combining the different asset classes and investment products, a licensed investment professional can create a balanced portfolio that has the potential to fulfill your investment needs.From the core asset classes like equities and bonds to more complex investments such as absolute return funds, the choices facing investors today are both a challenge and an opportunity.There are many different ways to reduce risk and enhance the possibility of good returns, and, by combining a wide range of investments, managers are creating a whole new generation of funds.