These days we are seeing how one of the most emerging financial products are the so-called value investment funds. But do we really know what this new trend in investing means? Because in effect, the Anglo-Saxon term value has been incorporated with great force in the finance sector and perhaps never to go away again. In any case, you should know what it is and how you can take advantage of this trend. Among other reasons, because it can help you optimize investments from now on.
If you regularly follow the specialized communications media you will have detected that for a few months the word value has been incorporated into the language of financial products and more specifically that of investment funds. In recent months, quite a few models have been appearing that maintain this characteristic, which is included within what is value. Many of the small and medium investors are increasingly aware of what they represent today.
Well, value investment funds are grouped under very well-defined investment constants and it is necessary that you know them from this precise moment. First of all, it will mean a new opportunity that you will have to make the savings profitable. Beyond other technical considerations and until it can also from the fundamental point of view. Where you can choose these investment models over other funds of various kinds: variable, fixed, monetary, mixed income or of any other composition. This is one of the latest innovations offered by the investment markets.
Value investment funds: what are they?
This class of very special financial products are basically another form of investment that is characterized by its managers investing in companies that meet a basic and essential requirement and that is none other than those derived from the principles of value investing. In other words, what is traditionally called an investment in value. What does this mean exactly? Well, something as simple at first glance as those that can create a higher profitability short, medium or long term. With sensible differences with respect to other management models.
In any case, these companies must meet a series of requirements to be considered as value, and where some of the most relevant are those that we expose below:
- The first condition that they must provide is that they are companies with competitive advantages and that it is a definition that characterizes them above other more technical considerations.
- If there is something that distinguishes this class of companies, it is because they are listed below their real value and as a consequence of this scenario in the markets it can be said that they are cheap. In other words, they have a higher revaluation potential than the others. In this way, you will always be in a position to generate higher capital gains than those established in other securities on the equity markets.
With very professional teams
Another concept that is closely linked to value companies is that they must always provide an excellent management team. As you have seen, one of the nuances to invest in the stock market is that the company is very well managed from its direction. In this sense, it is very common for those with the best professionals have a more favorable behavior in the equity markets. To the point that this factor can be a very powerful and effective filter so that you can develop your investments from now on. Not surprisingly, not all listed companies are the same with respect to this particular aspect.
On the other hand, you cannot forget that investing in value, or what is the same in value, can become a true ally of yours to analyze what will be the composition of your next investment portfolio. Not in vain, you will rule out a series of stock proposals that do not meet this expectation in any way. As with investing in this type of fund, you will be advised by investment professionals who are professionally dedicated to pursuing this goal so desired by all financial agents. Do not forget that find value It is one of the most relevant purposes for any financial intermediary.
The fashion of value funds
It is a trend that is booming and there are already many small and medium investors who demand this class of investment funds so characteristic. However, some criticisms arise from certain levels of management that will make everyone ponder whether or not to subscribe to them. As for example, the criticism derived from the fact that its valuation and the strength of investments on small listed companies can cause liquidity problems. This is a first incident that you can find from now on. To ask yourself whether or not you deserve the formalization of this kind of investment funds that are so special and at the same time atypical.
On the other hand, another aspect to consider from now on is that small and medium investors have no choice but to understand that management value has a recommended long tenure period. Namely, between five and ten years and in any case superior to that shown by other more traditional or conventional investment funds. In this sense, it can serve as a very effective complement to carry out a balanced portfolio management and with good prospects to achieve a great performance over the years. In no case for fast operations or relatively short periods of duration.
Factors that are analyzed
To determine this value it is necessary to specify a series of aspects that is in charge of financial analysts. For example, those derived from the criteria that each manager maintains or applies on what the value concept is and represents. It is very important in this sense to analyze in great detail the existence or not of opportunities in the market. Especially in the big scenes instability or volatility in equity markets. Because, among other reasons, they can represent real business opportunities at any given time. With a more constant and satisfactory revaluation than in the other stock market proposals.
On the other hand, value investment funds are more profitable when they are directed to the long term and are equity value funds. With a nature that can be very diverse since they can be constituted in the great Ibex 35 values and that focus on investment in small or mid-capitalization companies, mainly in the Spanish Continuous Market. But also from other stock indices from anywhere in the world to diversify the investment portfolio in a simple and balanced way.
What are value funds looking for?
This is a question that small and medium investors ask themselves very frequently and that requires clarification so that they can develop their investments correctly from now on. Well, above all to reach understandable businesses, with favorable prospects, especially with low indebtedness and, mainly and what is more important for users, that they carry a very competitive purchase price. So that in a more or less reasonable period of time it can be profitable and obtain clear capital gains in the income statement.
While on the contrary, a good part of these innovative investment funds have demonstrated their ability to generate an excellent long-term profitability in the equity market. Especially investment funds linked to the stock market and very specifically the Spanish one. With intermediation margins higher than those offered by other formats in this class of investment products. An aspect that must be valued above other kinds of technical considerations.
Most profitable models
One of the investment funds that currently shows a better performance than the rest is the one that invests in the Spanish equities and Portugal. Counting on securities with great options to revalue in the coming months, such as, for example, companies such as Naturgy (Natural Gas), Repsol and Siemens Gamesa. It is just one of the alternatives that small and medium investors can choose if they want to take advantage of the peculiar characteristics of the so-called value investment funds.
On the other hand, it is also to consider the fact that this financial product is constituted as the form of investment that provides the best long-term results. And in this sense you must understand them, but showing that it is an investment that carries its significant risks and as such you must assess them from the moment they are hired. In this general context, they are based on the acquisition of assets at a price significantly below their intrinsic value. Not surprisingly, this is one of the main axes where it operates and as such you must assume the approaches to make the savings profitable from any time and situation. This is more or less characterized by investment funds known as value.