Investment funds are one of the products for which small and medium-sized investors are mostly chosen as an instrument to make their savings profitable. They are very easy to hire and also allow diversify monetary contributions through different financial assets. Not only from equities, but also from fixed income and from alternative investment models, which are what we are going to discuss in this article below. As one of the options in difficult times for the financial markets.
Within this general context, national investment funds currently exceed 5% positive profitability in the first four months of the year, according to the latest data provided by the Association of Collective Investment Institutions and Pension Funds (Inverco). Where it is shown that the joint assets of the collective investment, that is, funds and companies, experienced in April an increase of 3.072 million euros and stood at 478.298 million, which represents an increase of 0,6% compared to the previous month, March.
In the first four months of the year, the volume of assets has increased by 5,1%. Where, the number of participant accounts has currently been around 14.168.573, which represents a reduction of 3,3% compared to December 2018. While on the other hand, investment funds registered in April net reimbursements amounting to 184 million euros. In the whole of the year, accumulate net repayments of 698 million euros. What supposes an increase in the operations carried out on the part of the small and medium investors. But where alternative investment funds have become one of the options we have to invest from now on.
Alternative real estate funds
It is one of the most commercialized models by management companies and its objective is to beat the profitability of other investment funds considered as more generalists. It cannot be forgotten that they are linked to one of the most prominent sectors of the national productive economy. Both in what refers to values of the construction sector, as to real estate and in general everything that has to do with with the brick. It is true that your exposure to risks is significantly higher than in other more traditional investment funds. But on the other hand, the payoff can be higher in the form of higher profitability.
This class of investment funds are characterized by being more volatile than the rest. That is, they present a greater difference between their maximum and minimum prices. But whose effect is less than in the purchase and sale of shares on the stock market. Among other reasons because this class of products for collective investment is aimed at in the medium and especially long term. Beyond other considerations of a technical nature and perhaps also from the point of view of its fundamentals. The only drawback is that its offer is not as powerful as in the other investment funds. With the presence of fewer savings models and under very similar structures among all of them.
Based on currency exchange
It is a trend that has been imposed in recent years by the most aggressive investors in the financial markets. It has the advantage that many different financial assets can be chosen within this sector in investment: Euro, Dollar, Swiss Franc, Japanese Yen or Norwegian Krone, among some of the most relevant. Depending on the crosses that occur at all times. Despite popular belief, it is an investment that carries excessive risks in operations carried out by users. To the point that a lot of money can be left on the way due to its high volatility.
While on the other hand, we cannot forget that these financial assets are constituted in a alternative to traditional investment and more conventional. Because there are also many models where we can choose from now on. International managers attach great importance to these financial assets and as a consequence of them they are not lacking in their investment proposals. Under different formats in its strategy aimed at investment so that they can adapt to the real needs of their participants.
Latest trend: raw materials
It is the latest innovation offered by international managers to make savings profitable from a different perspective in terms of the composition of investment funds that have these special characteristics. Because in effect, they can range from basic foods, such as wheat, soy or cocoa to others that are linked with energy, as is the specific case of gas or oil. It is distinguished because they have a more than significant revaluation potential and that in some cases it is close to levels around 20%. But where risks are also present and you have to know how to underwrite them according to each conjunctural moment.
On the other hand, it is an investment that can be very interesting at times when the weakness in the equity markets is a fact. Before him risk of the fall of the more conventional financial markets. While it can generate many revenues in the operations developed by small and medium investors. Where it cannot be forgotten that there are more and more investment funds that maintain these commercial constants under different investment models. And in any case, they are present in all the investment portfolios marketed by the different national and international managers.
Cryptocurrency funds
Of course, this is the most innovative trend at the moment and therefore its investment models are much more limited. To the point that very few funds of these characteristics are being marketed by management companies outside our borders. Based on various digital currencies, where the most relevant presence is that of Bitcoin, but with other coins of special relevance such as Litecoin, Ethereum, etc As you can imagine, the risk of these positions is huge and above other financial assets.
Investing in virtual currencies through mutual funds is a more aggressive idea through which you can earn a lot of money. But for the same reason, leave a lot of euros on the road due to the volatility in the price of these very special financial assets. And this is an aspect that investors should take into account from now on so that we do not get any other surprises from now on. Of course, it is not a highly recommended investment for the vast majority of small and medium investors. Especially if they do not have learning in this kind of operations.
Linked to bank deposits
In contrast, there are investment funds that are linked to fixed-term bank deposits. They are very conservative or defensive models and, unlike the previous ones, they do not have many risks. But in return, the profitability that can be obtained is a very reduced one and is framed in a strip that goes from 0,20% to 1,50% in the best case. It is constituted in a format to create a savings bag for the medium and long term. While on the contrary, it is a very simple product to understand and that does not require a high knowledge of financial culture.
On the other hand, it should not be forgotten that the European Central Bank (ECB), at its monetary policy meeting in April did not introduce changes in official interest rates. In other words, it will not affect the interest rate reported by these basic investment funds. Of course, it is a strategy with which at no time will we be able to become millionaires due to the weak intermediation margins they have. Just as they are very affordable for all profiles of mutual fund participants. Beyond other technical considerations that will be the subject of other articles.
In this context, investment funds in general recorded a positive return of 2019% in April 1,13, so that the accumulated profitability in the year stands at 5,03%, making 2019, in terms of profitability , in the best first quarter of the historical series. But it will not always be the same since this is a very uneven product in its quarterly results. With very important differences from one quarter to another of the year. For this reason, investment funds should not be focused on very short periods. If not, on the contrary, it is very convenient to direct them to the medium and especially long term. So that in this way, the estimated returns can be achieved by national and international management companies. Beyond other technical considerations that will be the subject of other articles.