The change of direction in the monetary policy of the central banks has not been transferred to the profitability of monetary funds, despite the fact that these products are offered by banks to their clients as an alternative to deposits and interest-bearing accounts. The large banking entities are still reluctant to transfer the sharp increase in interest rates from the ECB to more traditional savings products, such as accounts or time deposits, which does have an impact on the Euribor, and monetary funds, have become a commercial alternative, although its overall performance last year was unattractive.
According to the latest data from Inverco, the association that groups collective investment institutions, these funds ended in 2022 with a negative return of -0.57%. And, within the top sales of the big IBEX banks, there are few who managed to improve the final photo of last year. In other words, throughout 2022 it was more profitable to have the money in demand than in this type of product, even though its remuneration has been practically nil.
This is a paradoxical behavior, since the rise in interest rates, in the middle of the year, did not produce a rise in the yields of the State debt. As José María Luna, a partner at Luna and Sevilla Asesores Patrimoniales, recalls, the portfolio of these funds was made up of debt that had been acquired with negative returns and, as maturities occurred, they have been renewed with higher interest rates. But despite this, these interest increases, for example, those registered by the Treasury Bills, have not been reflected in the final behavior of these vehicles, among other reasons due to the expenses they bear, including management and depository, which helps to swell the bank’s income statement.
Monetary funds have been in purgatory for several years. Specifically since the ECB opted for an expansive policy. Thus, according to Inverco data, the accumulated profitability of the category, one year, three and five, moved in the red, from -0.57% to -0.30%. Mar Barrero, director of analysis at Arquia Banca Privada, recalls that these products have had zero or negative returns for a decade. On the other hand, deposits have performed better. According to data from the Bank of Spain, the average interest on fixed-term deposits stood at 0.70% in November, but in 2021 it also ended in positive numbers, 0.06%. The lowest remuneration stood at 0.02% at the end of 2020.
Heads and tails of the best sellers
As for the top sellers of the moment, there are distinctions and the key to whether they stay ahead or behind the average for their category is closely related to the costs they bear. Here, the ones that have performed best are those with the lowest commissions, such as BBVA Bonos CP, which managed to end the year in the black, like BBVA Ahorro Cartera, while the short-term debt fund of the The same entity has managed to beat the category despite ending the year in negative. Likewise, Bankinter’s monetary fund, Bankinter Capital 4, has also had a better performance, while Banco Santander’s product has managed to tie with the category.
The Caixabank funds, Caixabank Monetario Rendimiento, in their standard, premium and plus aspects, have had the worst evolution, whose evolution has been worse, with returns of -0.60%. And it is that, as the experts remember, the key in these products are the commissions. It should not be forgotten that in investment funds where the expected return is close to 0%, the participant has to opt for those whose charges are the lowest possible. “The winners are the ones that not only have the lowest fees, but also the ones with the shortest maturities,” insists Luna.
In relation to commissions, precisely the depressed profitability they obtained led the managers to embark on a war to lower them. Thus, to try to increase their attractiveness in an environment of negative rates, they cut them to the minimum, well below the average for other categories of funds, and also below the maximum commission that can be charged by law, which is in 1%.
The monetaries monopolize the second position in subscriptions
For Carlos Farrás, managing partner of DPM Finanzas, monetary funds could be an alternative to liquidity now, “since with inflation at current levels it makes no sense to have liquidity.” And, despite the low returns that they market, they continue to increase the volume of subscriptions, precisely because of their conservative nature. For Barrero, the alternative to liquidity would be, more than monetary funds, fixed-income funds, both public and private, with average durations: 3 and 5 years.
Regarding the evolution of assets, the monetary funds have closed the year registering a notice of the same of 17% in 2022, 722 million euros, to exceed 5,200 million euros. It so happens that it is the second category that registers the greatest increase in subscriptions, behind only profitability and ahead of categories such as guaranteed targets and fixed income. In the month of December alone, they registered almost 2% higher inflows.