Almost all investors know that dividends are the part of the profit of a company that it decides to distribute among its shareholders. Is a fixed and guaranteed remuneration that goes to your checking account every year based on your pay periods. They are also considered as a part of the fixed income within the variable, regardless of how the price of their shares is quoted. Such is popularity that every year there are thousands and thousands of small and medium investors who opt for this special investment strategy. Although for many analysts it is aimed especially at profiles of investors of a defensive or conservative nature.
Dividends, in any case, are paid in cash and this operation is formalized semi-annually, although on occasions listed companies may decide to pay a bonus. Until a few years ago it seemed that this shareholder remuneration was a matter of shares on the stock market. That is, to collect it there was no choice but to go to the stock markets. This trend has happily changed for the better since one of the most popular products such as investment funds has taken the baton to pay it on behalf of its participants.
Currently, about 15% of the Investment funds provide this feature. They are not from the variable income as many users may come to believe. Rather, on the contrary, this remuneration strategy has been extended to fixed-income, monetary, alternative funds, and ultimately, of any nature or composition. With the same payment periods as in the purchase and sale of shares on the stock market. In other words, annually, semi-annually, bimonthly or quarterly, depending on the model chosen. With an increasing offer from the different international managers.
Return on funds
Another mistake made by a good number of investors is to conclude that dividends in mutual funds are less profitable than those generated in the stock market. Of course not, and in fact there is the paradoxical case that at the moment there are some funds that already offer a higher dividend yield than that from the stock markets. Around 8% and 9% and whose distribution goes entirely to the bank account of the users, after the opportune cut of the taxes that are applied on this remuneration to the shareholder.
On the other hand, it is true that equity investment funds tend to be much more generous than those derived from other financial assets. With some differences that can reach or even exceed five percentage points. Something that is logical to understand by the smartest small and medium investors. Another aspect to take into account at this time is that these payments are no longer sporadic but affect many of these financial products. Of course, more than you can think initially and it is enough that you check the current offer to realize this fact.
How are payments channeled?
One of the great doubts that investors have refers to how this remuneration is collected. Well, the shares must be purchased before the dividend issue date. Namely, with some anticipation just as it also happens in the stock market. With a profit margin that moves in a very uneven range that is located at only 1% and even very close to 10%. It is really striking the fact that dividends in investment funds are today one of the most profitable in the financial markets. One reason why many savers are turning to this financial product at the moment.
This remuneration will go to the users' current account within a period that does not exceed seven and ten days. With a slightly higher delay than in the purchase of shares, although of course it is governed by the same mechanism. You will only have to go to the funds file to verify that the payment of dividends is really enabled. Although this information will be able to tell you from your usual bank to analyze if it really suits you or not to go to this investment system. Beyond other technical considerations and in some cases also from the fundamental point of view.
It does not imply that they are better funds
In any case, the fact that an investment fund distributes dividends does not indicate that it is better or worse than those that do not opt for this strategy in terms of remuneration. Quite the contrary, it may happen that discount from your quote in the financial markets. And in other cases, there is no doubt that they can have a very negative evolution as a consequence of the composition of their portfolio. In this sense, a piece of advice for investors is not to choose their mutual funds because of this factor. But on the contrary, by other much more relevant and even profitable variables.
From this part of the analysis on the dividends provided by investment funds, it should be pointed out that a large part of the management companies have also opted for this payment system with the aim of incentivize your purchase to potential customers. Because in effect, an emotional effect is created on the decision that these people are going to make from now on. With a predilection for these funds compared to the rest that are available in the markets. It is an opportunity to get a fixed and guaranteed interest every year, practically without exclusion.
Develop a savings bag
On the other hand, some of the most relevant advantages of this class of dividends and that are substantiated in the contributions that we are going to expose you below and that differ significantly from those generated through operations on the stock market. Pay a little attention because they can help you build a stable savings bank for the next few years.
- You charge a fixed dividend every year while your exposure is frankly less than that of other financial products, such as those derived from your operations in the equity markets.
- You can get a performance that is greater than that contributed by listed companies in a bag. This is a trend that has been consolidating in recent years and that you may not be aware of at the time of reading this article.
- You have fund hunters Very powerful investment funds that will tell you which investment funds have these special characteristics. You will have to have a little patience since there are many funds and you will have no choice but to apply a series of filters until you finally reach these products.
- Generally, the issuance of dividends in investment funds is with a annual periodicity, but if you want them to be every trimester, you won't have too much trouble contacting them. Only that you will have to spend more time in its corresponding search.
- It is a very effective strategy to develop an investment to longer terms and where you will be more protected than if you opt for the direct purchase of shares in the stock markets. You will only have to detect whether or not your hiring is convenient for you based on the profile that you present as a medium and small investor.
Some tips about your payments
On the other hand, it is very convenient that if you choose this investment you take into account some peculiarities in this kind of investment, so original and innovative at the same time. First of all it will be necessary for you to have many titles bought if you want the payment to be really relevant. Not surprisingly, with small contributions there will be very little money that will go to your savings account. More or less like it happens with companies listed on the equity markets.
In another order of things it is very important that you choose a asset management investment fund so that you can adapt to all scenarios in the financial markets. Especially in the unfavorable ones where you can lose a lot of euros along the way. In this sense, you cannot forget that a change in background can solve the problem with particular efficiency, beyond the investment approaches you have at that time. Because of what it is about at the end of the day to improve your positions and if they pay you a fixed dividend every year, then better impossible.
Finally, one of the keys to optimizing operations in this class of financial products lies in choosing the most profitable investment funds in recent years. Or at least they accompany the trend of the financial markets, whatever the asset you choose at that time. Because it does not necessarily have to be from equities, but you can opt for other different assets. It is one of the keys to being successful in investing through funds.