After the hiatus in August, the markets recovered in September the positive trend of previous months, allowing investment funds to increase their assets to 270.153 million euros, which represents a increase in September of almost 1.500 million euros (0,6% more than the previous month), according to the latest data from the Association of Collective Investment Institutions and Pension Funds (Inverco). Where it is shown that in the first nine months of 2019, investment funds have accumulated a growth of 4,9% (12.638 million more than in December 2018).

It is then the opportune moment for investors to consider how to make an adjusted and balanced investment fund portfolio in which the economic reality of the moment is taken into account. That is, the economic recession, interest rates at negative levels and the exit of Great Britain from the European Union and it is known as Brexit. Of course, they are new variables that will determine that we select more suitable investment funds than others.

The objective of this investment strategy is none other than to be able to maintain a profitability in certain complex moments for the interests of small and medium investors. Where safety must come first above other series of more aggressive evaluations that must be eliminated from now on to avoid unwanted situations. In this context, there are many combinations that can be made with investment funds. But in any case, we are going to offer the best ideas so that we can achieve a more interesting return on savings.

Fund Portfolios

Equity assets cannot be absent in the preparation of our next investment portfolio. But in all cases being very selective in their choice and that will be the key that we can have a little more profitability from now on. In this sense, equities are the part of the funds that can offer us the most profitability, although it does involve certain risks in operations. The approach to our investment strategy should be aimed at contracting funds that diversify  the offer of national and international stock exchanges as a formula to preserve our invested capital.

In this sense, one of the best proposals at the moment is materialized by a balanced portfolio where the US and European bags fairly. Without the presence of emerging markets, which, although with great growth potential, are the financial markets that may suffer the most in a recessionary scenario such as the one that arises from now on. So that in this way, risks can be eliminated in the equity markets, in some cases clearly unnecessary.

With defensive values

Another investment strategy that we must address is related to the securities that make up these portfolios. It will be very important that come from defensive sectors that can perform better in the most adverse scenarios for equity financial markets. For example, those from electricity, consumer goods, highways and in some cases distribution companies. There is no doubt that this composition will significantly reduce the risks that small and medium investors may harbor. So that the interest we have at the end of the year can be higher compared to other investment models in the funds.

Another very interesting idea for retail investors is to opt for funds that take into account the dividend by listed companies. It will be another guarantee to avoid more than complicated situations in the coming months or year. Not surprisingly, its behavior may be better than in the rest of the stock market values ​​and therefore we cannot reject this proposal that can offer us more benefits from now on. To the extent that there are investment funds that are based exclusively on this characteristic of the securities. Both in the field of national equity markets and outside our borders.

More careful with fixed income

Despite what some small and medium-sized investments may believe at the moment, investment in fixed income is not safe at all. If not, on the contrary, and in the current context, it can further complicate our situation regarding the complicated world of money. With a risk higher than that of equities, something that has not happened on other occasions, but now and in the face of accumulation of debt It may give us more than one negative surprise at any time. We will have no choice but to be very proactive with this financial asset within investment funds.

To avoid situations that are very unwanted for investors, the best proposal is to choose reliable assets that can act as a refuge in these situations. One of the most recommended are US bonds, which may be the most stable in this new economic outlook that awaits us from now on. Where you can generate an annual return of around 2% or 3%. In any case, it should be included in the next investment portfolio that we will develop in the coming months. Like German bonds, although to a lesser extent, as they can better withstand this economic situation with better growth prospects.

Alternative assets

More aggressive investors can include alternative mutual funds that can do better than the rest of the market. In particular, in those based on some raw materials such as oil, gold, silver or gas. Although it is also very true that its risks are significantly higher than in other financial assets. But with the advantage that some of them are immersed in a clearly upward trend, as in the specific case of the yellow metal. Which, on the other hand, also acts as a safe haven value in the scenarios of greatest weakness for the equity markets.

While on the other hand, it can be a very interesting option to improve the intermediation margins of investment funds. Like a key to explain the better behavior of some investment portfolios over others and that after all should be one of our main objectives in the coming years. It should also be noted that alternative financial assets are characterized by their high volatility and this can make it difficult for us to invest in the shortest periods of permanence.

Defensive cut wallets

But in any case, it can be an excellent solution to try that our purchasing power does not decrease in the coming months as a result of the instability in international stock markets. But never in the portfolio that small and medium-sized investors of a more conservative or defensive cut are going to develop. Among other reasons because it can create more than one problem in the coming months due to price fluctuations. What they should never do is rely on a strategy that relies on speculation in the equity financial markets.

In these cases, it is better to go to some other monetary fund but knowing that it will not offer us any profitability or in your case it will be really minimal. But it will serve at least so that small and medium investors do not lose money in their positions, an aspect that certainly must be valued in the most defensive investment strategies where safety and the preservation of savings prevail above all. This is the only objective that has to subscribe an investment fund with these characteristics and that on the other hand are those that have a lower commission, as well as in the expenses for its management or maintenance. But with a minimal recruitment in recent years as a lack of interest on the part of users.

Fund profitability

After the doubts generated in the month of August, the financial markets recovered in September the positive trend of previous months, and closed the quarter with positive returns in the main stock market indices, according to the latest data from the Association of Collective Investment Institutions and Pension Funds (Inverco) ..In this case, the Spanish benchmark Ibex 35 index stood out, which in September posted a positive return of over 4%, although the other indices also posted positive returns.

In an environment of greater stability, the IRR of the German 10-year bond increased to -0,57% from -0,70% the previous month and the yield of the Spanish 10-year bond increased slightly to 0,13 %. The risk premium in Spain was reduced and closed the month at 73 bps (83 bps in August). The exchange rate of the euro against the dollar closed at 1,09, which means that for the third consecutive month the American currency experienced a revaluation of close to 1% against the euro. As one of the options to take positions in the coming years.