If you're many years from retirement, you may be willing to take a higher level of risk than someone who's close to retirement.

Historically, equities have achieved a higher level of return over the longer term than other types of investment. However, over the short term, the value of equities can fluctuate.

For this reason, funds that invest mainly in equities are generally regarded as being most suitable for those in the early to middle years of their careers. For these people, the prospect of short-term volatility is less important, as the prospect of higher long-term growth is expected to more than compensate.

Both passive and active equity funds are available. The passively managed 'tracker' funds seek to match the return of the UK/global equity markets (as measured by the FTSE All-Share index and FTSE World ex-UK index respectively). The actively managed funds try to achieve a return in excess of their respective equity market returns.

You should be aware that the active equity funds might produce significantly different returns from the equity markets in which they invest. They may outperform or underperform the index to which they are benchmarked, particularly in the short term.