It seemed important to us to write an explanatory article on investment funds, the different shapes under which we can now find them on the financial markets, and finally their interest in terms of investments.
1. SICAVs (Investment Companies with Variable Capital)
It is the most common form today of investment funds.
What are the main advantages of a SICAV?
- it is possible to buy and sell the shares of a SICAV at any time, regardless of the quantity requested or offered
- the exchange price is equal to the book value, calculated daily by a professional administrator
- the SICAV allows immediate access to a diversified portfolio of investments managed by business managers
iPRO Growth Fund is precisely a SICAV.
2. Closed-end investment funds
The other known but less frequent form of investment funds are closed-end funds. These are traded on the Stock Exchange and their price depends on supply and demand and not on book value.
However, closed-end funds do not make it easy to buy and sell the quantities you want.
3. ETFs (Exchange Traded Funds)
Finally, the investment funds which are becoming the best known today are the ETFs.
ETFs are the best-known form of passive management assets: they only replicate benchmarks. And their main advantage is a quasi-guarantee of performance similar to the chosen index.
But at the same time, ETFs have 2 major disadvantages:
- on one hand, they present a high potential volatility
- on the other hand, they invest in all stocks or bonds of the same index
As a result, they include in their portfolio investments that a professional manager would not include, either because the price is too high, or because the underlying company does not respect the criteria of good governance.
What is the point of investment funds?
Investment funds are above all a relatively easy way to access difficult-to-access investments.
Because today, even if investing in the stock market has become quite easy to achieve in practice, the main difficulty remains. How? ‘Or’ What know which stock is better to buy, rather than which other?
For the neophyte, the choice quickly becomes difficult. Unless you have the time and the training to spend hours doing personal research …
It is for this reason that funds are an interesting investment tool. They allow, with small initial amounts, to invest in different markets, stocks or bonds, or even a combination of the two.
They should therefore constitute one of the first investments carried out by a family, in order to build up long-term wealth.
As a reminder, our investment strategy is primarily based on our great mastery of various tools. Then on our ability to study and analyze financial markets. We finally add all our technical and commercial expertise. That acquired for almost 30 years in the management of our client’s portfolios.
Remember: your future deserves the best!