Financial markets registered sharp falls during the past year due to the war in Ukraine, rising inflation, interest rate hikes and great uncertainty about the national and international economy. Although economic analysts point to a timid improvement in 2023, they emphasize that one must be cautious when undertaking investments. Likewise, you have to choose the assets to invest based on this very particular context.
For this reason, guaranteed funds and conservative investments are more advisable than ever given the moment in which we find ourselves. These are investment funds that ensure that, at a certain future date, part or all of the initial outlay will be retained. And even in some cases a guaranteed return is also offered.
In this sense, MAPFRE’s investment director, José Luis Jiménez, explained at the inauguration of the MAPFRE Gestión Patrimonial office in Palma that investors should look for assets with “guaranteed or protected” returns to preserve their purchasing power to the maximum in this indoor concrete.
“Investments should seek assets with “guaranteed or protected” returns
“We have to look for profitability and, in most cases, guaranteed or with protection, because we take high inflation for granted, which is going to reduce our purchasing power,” he says. For this reason, “protecting our financial heritage is a priority objective.” The director, in relation, adds that at MAPFRE they have always been “very active in the field of savings and investment and with the current situation we have room to beat the profitability of Letras del Tesoro”.
A safe margin
Guaranteed funds are useful products as long as they ensure, at a minimum, that you keep all or part of the initial investment at a set future date. However, it should be emphasized that these funds do not guarantee profitability at all times, but only on the expiration date, as detailed by the National Securities Market Commission (CNMV) on its website.
The main assets in which they are invested are bills and government bonds, although the portfolios may also include some corporate and even index-linked bonds, which makes them the ideal option for the most conservative. The key difference from other similar products is the money-back guarantees.
“For that, the guarantee has to be validated, demonstrate that the guarantee is solvent and it has to be approved by the CNMV. These guarantees can only be presented to the market by solvent entities with liquidity and solvency ratios”, points out the institutional sales director of MAPFRE AM, Eduardo Ripollés, who estimates that “since the rise in interest rates has been so vertical, the entry into guaranteed funds has been very fast.”
The guarantee must be validated, demonstrate that the guarantee is solvent and must be approved by the CNMV
Target return funds have also gained weight in recent months. They are fixed income products that also offer a fixed return to maturity, although there is no formal guarantee as in guaranteed funds. This makes them lose a certain attractiveness with respect to these, having to assume a greater risk in exchange for a lower return potential than other assets. MAPFRE has always opted for the guaranteed ones and, within these, for the most conservative, both in pension plans and in fund format or, in other words, in those that really guarantee 100% of the capital.
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