Investment funds are one of the preferred alternatives for Spanish investors to make their savings profitable. To the point that one in three people has subscribed a financial product of these characteristics, according to the latest data provided by Inverco. It is a savings model that has presented an average revaluation during the last year around 2,50%. With the advantage that they are presented under different formats: equities, fixed income, mixed or even from alternative approaches. Configuring itself as the main savings product at the moment.
Its importance in the investment portfolio of small and medium investors is fundamentally due to the scarcity of profitable proposals to improve equity. In this sense, it cannot be forgotten that traditional banking products do not go through the best of times. But on the contrary, they are immersed in minimum returns as a consequence of the cheaper price of money. And that has led to time deposits, promissory notes or even high-yield accounts not offering an interest above 1,50% at this precise moment.
In any case, investment funds have become the alternative to these financial products, although not without risk. Precisely so that these are more limited, you will have no choice but to apply a series of strategies so that they provide you with greater security in each of the operations. Depending on the composition of these funds and the fact that some may be more complex than others. Therefore they will require a greater protection by your performances. These will be some of the self-defense mechanisms that you will have against this popular financial product.
Currency protected funds
Of course, on some of the occasions the currency exchange it can harm your interests. To the point of limiting the profitability you can obtain from the moment you are hired. To avoid this undesirable scenario, there is nothing better than hiring an investment fund that is designed with currency protection. In this way, you will not be harmed by an unfavorable change in the contracted currency. Be it the euro, dollar, pound sterling or any other.
In this way, in some cases the losses will not be so strong when the scenarios are not bullish. While in others, it will simply help you improve the income statement with a much higher profitability. In any case, it will be an investment strategy that will not harm your personal interests. If not, on the contrary, it will be a very beneficial tactic to avoid less favorable scenarios for financial markets. Without ever having to pay additional commissions. In what will become an alternative to the management of your personal or family assets.
Active management of funds
Another of the formats by which you can opt in this class of financial products is for a management of investment funds that is a lot more flexible. Not surprisingly, you will get that you can adapt to all possible scenarios in the financial markets. Even in the most damaging to your interests. You can go from variable income to fixed income or vice versa, depending on the evolution of the different financial assets. And most importantly, without you having to do absolutely anything. Rather, this strategy will be in charge of the investment fund manager itself.
From this general approach, it can be a very useful method to adapt to new changes in economic cycles. Or at least when there is a significant variation in trend of financial markets. Like for example, from bullish to bearish. So that in this way you are in the best of situations to make your savings profitable. Whatever the profile that you contribute as a small and medium investor. At the moment, a good part of the investment funds are developed under this special characteristic. You will have no problems finding them in the offer provided by your bank.
Models with greater diversification
This is another of the strategies that can benefit you at some point in your financial life. Especially since you can combine different financial assets to try to make improve performance of this financial products. Through this method in investment it will be much easier to improve the intermediation margins. And at the very least, to reduce losses when the scenarios in the financial markets are not the ones initially proposed. In addition, its application will not require you at any time to pay any kind of commissions or expenses for its management or maintenance. To the point that these investment funds can be very useful at some point in your financial life.
On the other hand, diversification in mutual funds can serve to protect money against most adverse scenarios in the financial markets. To the point that it can make you earn money when in other situations this fact is more than unlikely. Through a correct combination of financial assets. Not only from equities, but also from fixed income or even from alternative or more innovative approaches. This is one of the advantages that choosing this model gives you in investing so flexible in its management.
Open to new proposals
Another key to achieving your goals is that the investment fund can include other more stable investment models. With the main objective of limiting the risks of the most aggressive part of the subscribed product. As for example, by means of some monetary asset of monetary nature that offers greater security in the funds deposited. Of course, its profitability will not be spectacular at all. But on the contrary, it will be a guarantee to protect your interests at the most appropriate time. Above other more aggressive formats in this class of financial products.
If this is your wish, you should not worry excessively since the offer offered by the management companies It is very broad and intended for all kinds of user profiles. Under a percentage that will depend on what your model is as a small and medium investor. In addition, these funds are very easy to understand because their composition is not very complex. You can find them both in the formats linked to equities and in fixed income. It is a more defensive strategy that can get you out of more than one trouble in the odd economic scenario. They are a need to complicate your life by subscribing to different kinds of financial products.
The safest: monetary
In the most complex scenarios you can even hire the so-called monetary investment funds. They serve as a bridge before you go to other more complex formulas. It is true that the performance you will get with them will be rather minimal. But at least you will stop the losses in your investment portfolio. To the point that you will have time to transfer it to other more demanding models. The return that monetary investment funds generate you oscillate approximately between 0,10% and 1,50%. Where it will be very important that you choose the correct currency to avoid mistakes that you can pay dearly at any time during the investment process.
On the contrary, they will have a lower risk in their hiring since they rarely contribute losses of special relevance. On the other hand, you cannot forget that these investment funds can serve you as refuge before the most complicated moments in the financial markets. Especially when the underlying trend in equity markets is clearly bearish. Of course, you will have very little problem with these financial products from now on. It is the great advantage of its formalization and unlike other much more demanding funds.
Cover volatility scenarios
Finally, this format can also save you from more than one trouble from now on. Although for this you will have to take more risks than in others. So that profitability is installed in your income statement in the worst moments of the financial markets. However, it is an investment model that is only advisable to carry out for specific periods of short duration. It is where they are most effective in improving the returns to your personal or family wealth.
Finally, as a complement to the investment, you can combine them with the purchase and sale of shares on the stock market or even with the odd deposit that provides an acceptable return for your interests. As for example, promotional that generate a return close to 1,50%. Although in most cases they will require some kind of connection: direct payroll, household bills or increase your relationship with the bank. It can be a mix that brings you more advantages than disadvantages. And therefore you must take it into account to protect your money from now on. Although it is from a more defensive posture than in the other investment models.