Which investment fund should I choose?

Investment funds are one of the products chosen by users to channel their savings in an efficient way. As a substitute for fixed-term bank deposits that have seen their profitability drop to the point of do not offer more than 0,5% in recent months. Well, in this sense, the funds have managed to convince small and medium investors to try to make the available capital profitable. Above other series of financial products more complex in its structure and mechanics. To the point of capturing the savings of a good part of these people.

Under this general approach, one of the problems associated with investment funds is that they offer a wide range of models. They not only come only from the equity markets, but also from the fixed or even from alternative or monetary formats. So that in both cases, positions in the financial markets can be improved from now on. From these kinds of formats, we are going to offer readers the best strategies to choose the best investment funds.

Anyway, this is a decision that will depend of the profile presented by small and medium investors. That is, if they are aggressive, moderate or intermediate so that they can adjust to the real needs they have at the time of contracting this financial product. Like the money that they are going to allocate to this class of operations based on their own characteristics in their conformation as users. With the aim of improving the profitability now offered by these investment products. And if it were possible to approach the return offered at this time by buying and selling shares on the stock market.

Choosing funds: type of markets

A first aspect that users should look at is the market they want to target from now on. That is, if it is the national or those from outside our borders and that in any case will determine the real profitability of the investment funds chosen. While on the other hand, it is very desirable that you look at the evolution of the financial markets that you have placed on the radar. In this sense, it is very relevant that the type of markets is chosen based on the trend that it shows at all times and in a way that is proportional to its profitability.

On the other hand, national equities must always be present in the portfolio of investment funds. Not only because they are the best known financial assets, but also because they are the ones with the most competitive commissions of all. Where you can save up to 30% in a good part of the proposals that management companies have been developing. Also, you cannot forget that a very small part of your savings can go to emerging markets. In this case, because they are the ones that can generate the highest profitability if they show an upward trend in the background.

Depending on the currency

Mutual fund currencies are very important because they can be a factor in improving the interest rate offered by this type of financial product. Fundamentally it is distinguished because it is necessary to have less knowledge of the operations carried out that derive from investing in a market index no currency risk, that is, whose currency is the euro, such as the Eurostoxx - 50, and also because they are companies that are strongly consolidated in the business panorama of the old continent.

The minimum investment to enter these funds depends on the characteristics of each of them, but currently there are products that can be subscribed from only 100 euros, although for the investment to produce the desired effects in terms of the perceived profitability it is necessary to deposit in around 3.000 euros at least. The closest funds being the ones that mostly pick up this trend. With the advantage that we are not going to assume unnecessary risks that can weigh us down on the operation at some point in your hiring. As with investment funds subscribed in dollars, Swiss francs or Norwegian crowns, to name some of the most relevant and well-known currencies.

Accumulated profitability

This should be another of the parameters that we must look at when choosing this investment model. But even knowing that past profitability does not have to be fulfilled in the coming months. If not, on the contrary, it should only be as an orientation to show the real state of the investment. In fact there are usually many fluctuations from year to year, as can be seen in the historical series. In any case, it is always very good to look at this data before formalizing the investment fund to know what its performance may be after its formalization.

While on the other hand, there are many factors on which the profitability of this financial product will ultimately depend. As for example, the conjunctural moment of the international economy, the events that develop during the year or the evolution of the equity markets around the world. In any case, this is a piece of information that must be consulted in the fund's brochures and which are available to all users. Both with regard to national products and those from outside our borders, which may present notable differences in one or another fund of the same category.

Opt for the best assets

It goes without saying that another of the data to be fixed from now on is the one that has to do with the trend of investment funds themselves. And within it, with the subscription of those who present a best real state at those moments. In some cases it may be US equities and in others, for example, raw materials. Each situation requires a different treatment that materializes in a portfolio of funds that can vary substantially, depending on the profile provided by small and medium savers. Because what it is about at the end of the day is to make profitable and optimize the capital available for investment.

However, it is true that there are other models that are aimed at the medium and especially long term that are governed by other financial constants and not only the moment their financial assets go through. This is one of the aspects that must be anticipated before your subscription to avoid unwanted situations from this kind of approach. Not surprisingly, one of the aspects that you should avoid at all costs is to subscribe investment funds without prior information and that may lead you to have some other negative surprises from the next few months, as they are happening to them. to a good number of small and medium savers.

On the other hand, it is also very useful to let yourself be advised by those responsible for investment in the entity where you are going to formalize this financial product. It is a service that is free and can bring you more than one benefit to improve your profitability. As well as not to make a wrong decision that you may regret later and that is another of the functions that investors have. Any mistake in the calculation can cost many euros in the balance of the operation.

Profitability in each of the funds

International equity funds show a growth in the month of 3,1% in percentage terms, and more than 1.140 million in absolute terms, according to the latest data provided by the Association of Collective Investment Institutions and Pension Funds (Inverco). Where it becomes clear that with regard to last year's accumulated, international equity funds experience the highest growth of all categories in percentage terms (almost 29% increase), which represents 8.540 million euros more in absolute terms. Mixed fixed income funds registered very positive net inflows, which together with the revaluation by market allows this category to increase its volume of assets by 1,4% compared to the previous month (570 million more than in November).

In this way, mixed fixed income funds have recovered the assets lost in the first part of last year, with an increase of around 2%. Likewise, mixed equity funds, that is, with an exposure to stocks in their portfolio of between 30% and 75% of the total, show high growth in the month, and are only behind equity funds. international in terms of percentage growth in the year (21,3% more than in December 2019), not counting fixed income, whose increase was partially due to the new classification of some monetary funds as short-term fixed income.