Investment funds are one of the most attractive products to grow your savings for its versatility and high capacity for diversification. Before you start hiring it is important to have some basic concepts clear.
The investment funds are Collective Investment Institutions that add the contributions of many savers to manage them through a single vehicle.
A fund will invest in different assets to try to obtain maximum profitability within its investment policy. To better understand it, a fund takes money from its savers and moves it by buying stocks, bonds, treasury bills and even other funds.
In this sense there are different types of funds depending on where they invest and how they do it. Thus, it is possible to speak of funds of fixed income, variable income, mixed, global, guaranteed, funds of funds or real estate funds. At the same time it is possible to distinguish between passive or active management funds and accumulation and distribution funds.
To understand how an investment fund works, it is also necessary to know who is involved in its operation.
Everything starts with the participants, that is, the savers. The owners are the owners of the fund, which divides its equity into units.
The fund is managed by a management company. As its own name indicates who is the fund manager and who decides how and where the money is invested.
A fund cannot be managed by more than one fund manager, but a fund manager can have several funds.
In addition to the manager, there is the figure of the depositary of the fund , who will be the custodian and monitor the assets that make up the fund. This entity must be registered with the CNMV.
The basic operation of an investment fund is very simple. The participant who wishes to invest acquires shares of the fund and the manager is in charge of trying to make him earn money and that the fund grows.
The units are the aliquots or parts that form a fund. Unlike the actions of a company, it is not a fixed number, since at any given time there may be those who sell theirs or those who buy new ones.
The price of each share will be determined by the division of the fund assets between the number of shares and that will be the value of purchase or sale at a given time. This may vary by the entry or exit of investors or by changes in the market value of the assets that make up the fund. These are the ones that will really affect the performance you get from a fund.
As an investor you can choose to withdraw your money from the fund at any time, although there are some that have specific windows for withdrawal.
In doing so you will not pay taxes in case you choose to contract another investment fund . Otherwise, you will be taxed in the income tax return for the profits obtained at a rate of 19% for the first 6,000 euros, 21% for the amounts ranging from 6,000 to 50,000 euros and 23% for the excess that exceeds 50,000 euros.
Like most financial products, mutual funds carry a series of commissions to unitholders. These commissions have to do with both the operative and the custody. These commissions are marked by law and can never exceed the following percentages for each of the following concepts:
The underwriting fee is paid to the manager for investing in the fund and is calculated as a percentage of the capital invested, which in the end you invest less than you think.
The redemption fee is charged when you sell the fund shares.
The management fee is paid to the manager for her services, ie by investing the money from the fund. This commission is accrued daily and is already deducted from the net asset value. In other words, it subtracts from what your stakes are worth. Active management funds will be more expensive than passive management in general terms.
The management fee can be added a commission for success, which will subtract up to a maximum of 9% of the profits obtained by the fund.
The deposit or custody fee is charged by the depositary.
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