Investment funds are gaining more and more weight among new investors. The low interest rates that prevail in Europe continue to penalize the most conservative savers, since saving in products such as deposits or bank accounts begins to cost them money, either due to the low return compared to inflation or due to the application of new commissions.
At a time like the present in which less risky profiles seek to take advantage of their savings with new products, the alternative of investment funds is presented as an attractive solution. In fact, there are several banking entities that try to get their clients to take the plunge and become investors, promoting the hiring of investment funds to the detriment of deposits.
And, on this point, the estimates are clear: according to the XI Inverco Observatory survey, 94% of managers expect an increase in equity in investment funds in 2021 compared to the previous year. Everything seems to indicate that with the current situation of low interest rates on the continent, together with the reduction of deductions in pension plans, investment funds will be an alternative for investors.
However, before contracting the recommended product from the trusted branch, you should think twice and analyze the offer that exists in the entire market, since outside the entities the range of products is, in general, much greater. But is it also better?
Differences in the products offered
Practically, until the entry of the European directive Mifid II, the offer of was focused on own products, so the range of funds was smaller compared to that of large international managers, especially in those equity products. This means, in part, that the returns achieved by bank managers are, in general, lower than those of independent managers.
In fact, according to a report on the costs and yields of the Spanish IICs published by the CNMV (National Securities Market Commission) last year, the profitability of independent managers reached 4.3% in the last ten years, compared to to 2.8% of bank managers. These returns differ by up to 10 percentage points in variable income assets, although in fixed income there are hardly any differences.
To all this we must add the costs incurred when investing in this type of product, since, according to the CNMV, the greatest differences in commissions are observed in euro, international and absolute return variable income products. In all of these, the funds from independent managers have lower costs, since, in general, their offer is also much greater.
What are the best funds from your bank?
What to consider when choosing a good background
The fact of investing in a fund from a certain management company does not necessarily imply that it will generate a good or bad result, since different aspects come into play. However, if the bank itself offers the customer a specific product, it should be carefully analyzed and compared with others.
One of the keys lies in its behavior, although it is true that managers insist that past returns are no guarantee of future returns. But it will not only be essential to analyze your profits and behavior with respect to your reference index, but also to compare it with that of other funds that invest in companies of the same category. For example, if it is , the product will have to be compared with other technology funds. For this, different tools can be used to analyze funds or .
Another important aspect is that of commissions, since they play a key role when it comes to obtaining returns. And it is that the higher the investment costs, the lower the profitability. This is especially evident in the more conservative investment products, since by obtaining lower returns there is a risk that the commissions end up exceeding the profits.
In addition, along with these commissions, it will be necessary to take into account the price of the bank’s financial advisory service, if it is used. However, both in the case of dependent and independent advice, the entity must clearly indicate the costs to the client, so that the client can know at all times what is the price charged for investing in an investment fund. and for receiving advice, something that will be crucial to opt for one product or another.
However, if what is intended is to contract an investment fund from the bank of all life without this necessarily implying selecting a fund from the bank’s own management company, it should be ensured that the entity has a true open architecture in its offer. of funds in order to have access to a greater offer, not only from the manager itself, but also from different international managers.
And it is that the greater the offer of the bank, the greater the chances that there will be more interesting products with lower costs and the easier it will be to contract them. Otherwise, the most convenient thing may be to change banks, go to fund supermarkets with a greater offer or other platforms, such as Finect, where you can analyze the offer and start contracting products.
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