Seven of the ten most profitable investment funds in Spain exceed 20 points in cost effectiveness in relation to the amount invested
A curious paradox takes place in the market for investment funds in Spain: those leading the performance ranks do not match those which attract the most money to their portfolios. This is due to the traditional conservatism of Spanish investors and the vast and powerful network of bank branches which sell particular investment products determined by their trade policies.
In this sense, according to VDos consultancy, investment funds in Spain obtained net deposits that reached a total of 490 million euros in 2016. Of this amount, 479 million are concentrated in the ten most profitable funds.
The peculiarity of these leading funds is that they are small in size and, despite offering a high percentage of returns on investment, the amounts at stake are relatively modest (mainly net deposits worth less than one million euros) and accumulate high legacies. These features are common in 9 of the 10 most profitable investment funds in our country.
Focusing on the three funds leading the rank made by Vdos, the returns offered nearly reach thirty points. Thus, the Renta 4 Latin America fund, which belongs to Banco Santander yields 29’08%, Merch Oportunidades (owned by Merchbanc) reaches 28’58% and Sabadell Latin America (belonging to Sabadell Bank) up to 27’70%.
On the other hand, regarding the wealth that these funds accumulate, Sabadell hoards 5.3 million euros, Merch Oportunidades 4.8 million while Santander Bank accounts for about 1.7 million.
However, the high returns in relation to the amounts invested in these funds do not appear to ensure the confidence of investors in these financial institutions, because despite being leaders in profitability, investors withdraw large amounts of money from their holdings to recover what they have invested.
In this sense, the net asset value, that is, the amount the investor receives for each of the shares withdrawn from his or her investment fund, is in the first three leading funds of 19’66, 9’49 and 7.64 euros respectively (Renta 4 Latin America-from Santander Bank, Merch- opportunities and Sabadell Latin America Exchange of Sabadell Bank).
This data suggest that the market for investment funds in Spain is in good health, although a less constricted attitude in Spanish investors would improve even further the outlook for the sector.
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Del Canto Chambers’ Editorial Board