Investment funds are one of the most important institutional investors. They raise funds from the general public, financial institutions and companies, and invest them in long-term or short-term financial instruments according to the principle of risk dispersion. They are divided into open-end and closed-end and, according to their activity, short-term (cash) and long-term investment funds (equity, bond, hybrid or mixed). In the Republic of Croatia, the development of investment funds took place in the late 1990s with the enactment of the Privatization Investment Funds Act (PIFs) and the launch of seven privatization investment funds in 1997. The Croatian capital market is dominated by UCITS funds, while in 2019 the fund market was dominated by bond funds. The subject of this research are the characteristics of these investment funds and the impact of the Covid-19 pandemic on them. The connection between the Covid-19 pandemic and changes in the asset structure of investment funds is considered. The working hypothesis is that the Covid-19 pandemic affects the change in the structure of net assets of investment funds in the Republic of Croatia and the change in the structure of their investments. The objectives of the research are to present the characteristics of investment funds and their division and explain them on the example of the Croatian market and connect the conclusions with the economic crisis. The Covid-19 pandemic is emerging as an unprecedented health and economic global crisis, characterized by a sharp drop in GDP and adverse effects on financial systems. It affected the Croatian economy as a macroeconomic shock on the supply and demand side and a reduction in the NAV value of all types of funds and their average rates of return. Compared to 2019, investment funds lost HRK 4,1 billion in assets, with a drop of HRK 7,7 billion in the first quarter of 2020. The primary cause is considered to be the withdrawal of investors' funds (in bond funds) and the decline in the value of the stock market in equity funds. The largest decline in the annual yield of certain categories of UCITS funds, compared to 2019, was recorded in equity funds, followed by mixed and those in the category of others, while the smallest decline was recorded in bond funds. The Covid-19 pandemic did not significantly affect the number and structure of net assets of individual funds in open UCITS funds, so the number is dominated by bond funds, followed by equity and those from the category of others, while the structure of assets of UCITS funds by type is still dominated by bond funds, which amount to 78% of the assets of all UCITS funds. Furthermore, the Covid-19 pandemic also reduced investment levels by HRK 4,8 billion, mainly in bond funds; however, if you look at the investment structure, it has not changed significantly compared to the pre-crisis 2019.