Of course, one of the ways you have to invest your savings is through Investment funds. And within this financial product, in the benchmark index of the equities of the old continent, as in the specific case of the Eurostoxx 50. So that in this way, you can make the savings profitable from now on. And also, it serves as a very effective strategy to protect them even in the most adverse scenarios for the stock market. It conforms, in any case, as one of the alternatives you have to relate to the always complicated world of money.
The Eurostoxx generates different options so that you can look for the best alternatives for investment. Because in effect, it contemplates different funds that are adapted to each of the profiles that you present as a small and medium investor: aggressive, defensive or intermediate. For each of them there is a differentiated answer because support completely different management models. With a common denominator such as the derivative that they all come from this particularly relevant stock index.
Above all, they will allow you to be representing in European equities, but without being directly exposed on the stock market. Although with the disadvantage that these investment funds will not collect the capital gains that may be generated from the European stock market. Nor can you forget that it will entail an economic cost higher than that of buying and selling operations on the stock market. They are margins that can reach up to levels close to 2% on invested capital. But it will be the toll that you will have to pay to provide you with greater security in your operations in the equity markets.
Why Eurostoxx funds?
If you decide to open operations in this stock index through investment funds, you should know that one of the advantages provided by this strategy does not involve currency risks. In other words, all movements are carried out through the euro. Without any kind of commissions for the currency exchange. Another of its most relevant portations is that you can subscribe them for very affordable amounts to all households. Since 1.000 € forwards, through the model that you finally select based on your profile as a mean inverse.
You also have to value that you invest your money in companies that are strongly consolidated. To the point that most of them are the most representative of the business scene of the old continent. Through a diversification of available capital in every moment. So that in this way, you do not have to focus on a single value, but on a basket of several of different nature. That can even be combined with other financial assets. Even from fixed income to give more stability to your portfolio.
The nature of this stock index
The Eurostoxx 50 index is made up of the 50 most relevant stocks in the euro zone. The companies that can be included in this index come from the following countries: Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands and Spain. From the stage that presents this very special financial product, you cannot forget that the blue chips of the national stock market are also integrated: Santander, BBVA, Repsol, Endesa, Iberdrola and Telefónica. It is also worth noting that this reference index for the old continent is reviewed annually taking into account the number of shares and the level of free float of these with respect to the total. As in the Ibex 35, with the integration and abandonment of the most vigorous equity proposals at all times. Although it only affects one or two values at the end of each semester or year.
One of its main advantages is that you can invest your money in European equities with a more direct exposure in the financial markets. Because in effect, it is a portfolio of securities that allows you to protect positions more effectively. In this way, when the stock markets crash, these funds maintain a more attenuated fall tones. Although for the same reason, it does not capture the revaluations of the financial markets with such intensity. Its balance and stability is greater than through the purchase and sale of shares directly on the stock market.
Terms of stay
Another aspect of special relevance is that which has to do with the term of permanence of the investment funds linked to the Eurostoxx 50. Usually are recommended for longer terms, between three and ten 10 years. Depending on the characteristics that they present as a small and medium investor. Like the profile that you treasure from the beginning. Although in principle, they are always more favorable financial products for the most conservative savers. Where it is important to create a long-term savings bag. Even in some cases with the focus on retirement. Regardless of how old you are, and even if you are very young.
However, you are looking at a product for investment, if not different, at least with very well-defined characteristics. Where you take less risks than in other models. Although in exchange for meeting a series of expectations by this index. That is to say, that their shares revalue in the financial markets. And the higher its intensity, the better it will be for your interests. Because it will be a sign that you have earned a lot of money through participations in these investment funds.
Perhaps one of its biggest disadvantages is that you will have to deal with more demanding commissions than in other financial products: stock market, warrants or exchange-traded funds, among the most important. Because in effect, the opening of positions entails a series of expenses. You cannot forget that there are many commissions and of diverse nature: subscription, deposit, refund and management. All of them usually oscillate between 0,5% and 2% on the invested capital. As you can see, there is a lot of money that will come out of your checking account for these concepts. Therefore, it is very important that you take it into account before opting for this alternative to investment.
Its main features
Investment funds based on the Eurostoxx 50 have very clear points of differentiation. It will be convenient for you to know them to optimize operations from now on. Both to preserve your savings, and to get more out of your movements in these financial assets. Any detail can bring you closer to or away from these investment funds. Given this, they basically appear under the following peculiarities.
- Companies with greater specific weight of European equities. They are the most important companies in this economic area and well known to a good part of the small and medium investors.
- You do not have to contribute excessive capital, but your operations they require little money. Even less than in other more sophisticated management models. It is an advantage that can make you lean towards this solution to improve returns on savings.
- It is generally a passive management, where you are always investing in the same financial assets. With little or no variations on the investment portfolio developed by the managers.
- These investment funds allow you safeguard the capital deposited by the saver. At least without obtaining losses of special relevance. As on the other hand, it happens with stock market operations and other more aggressive financial products.
- At the end of the day it is a market that is not unknown to you. On the contrary, with all certainty that you will be familiar with many of the proposals offered by the Eurostoxx 50 at the moment.
- The terms of permanence in a large part of the offered proposal are excessively high for the interests of the most aggressive investors, destined for the medium or long term. It is really interesting that define the objectives that you want to achieve from now on.
Under the guaranteed funds format
Anyway, you have another alternative to invest your assets in European equities. Through guaranteed funds. As its own word indicates, they guarantee you a fixed profitability at maturity of the same. But provided that certain conditions are met in this financial market. To begin with its revaluation as a key to guaranteeing the operation. However, you will not pick up the possible rises of this equity index with such intensity. Especially, if you compare it, they are the usual movements that you make in the bag. Through the purchase and sale of shares.
Their main differences lie in the baskets of securities selected by the managers. They are aimed at a substantially different customer profile. With a higher or lower risk, depending on these variables. In any case, users, as in your own case, may be in purchasing positions in the most representative companies of the European economy: Allianz, Bayer, Daimlerchrysler, Deutsche Bank, L'Oreal, Nokia, Siemens, Unilever ...
You will only have to choose the investment fund that best suits your conditions as a retail investor. You have many formats to choose from and with various models in its management. Even with the option to guarantee the fund by maturity in regards to liquidation value. From small economic contributions, although perhaps with much more expansive commissions since its formalization.