Finance forum: Mutual funds 41 articles - 4.547 readings

Mutual funds are financial products that pool the savings of a large number of investors. They’re usually administered by asset management companies, such as capital management companies, or by individuals authorised to trade in the financial markets. The total capital is reinvested to guarantee a return for those subscribed to these mutual funds. The investments are made on the basis of certain risk profiles and specific diversification strategies.

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Investment funds: simple and diversified investing

Posted on 09.10.2023

Mutual funds are popular investment products that pool savings into diversified investment portfolios. But what does it mean and how do you invest in a mutual fund? Investment fund, shares in a basket of diversified assets Investment funds are useful financial instruments because they allow investors to do two things: a) diversify their portfolios and b) delegate the management of their funds to financial professionals (who must always be authorised). These investment instruments involve the a ...

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Funds that look like bonds but are not

Posted on 25.09.2023

There is a product that has a placement window and pays coupons, but it is not a bond: These are funds with a fixed maturity date. However, Morningstar urges investors to be cautious as the cost of the instrument can significantly erode returns. The remarkable growth of funds with a fixed maturity date In Europe, funds with a fixed maturity date are becoming increasingly popular, as some Morningstar data shows: over the past twelve months, these financial products have raised more than &e ...

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Costs are the Achilles heel of balanced funds (active and passive)

Posted on 12.09.2023

Most balanced funds do not beat the benchmark: ETFs also have significant costs, while active funds mainly offer the added value of professional management. Balanced funds fail to beat the benchmark Morningstar has published an analysis of balanced fund performance by Matias Möttölä, director of manager research at Morningstar, and Thomas De Fauw, manager research analyst. The analysis found that balanced funds underperformed their benchmark by an average of 2.54%. As Morningsta ...

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Active funds don't have it easy in emerging markets

Posted on 08.09.2023

The notion that emerging markets investing favours active over passive management - i.e., active mutual funds over ETFs - is probably nothing more than a cliché. Monika Calay, director of passive strategies research at Morningstar, discusses this in an interview conducted by Sunniva Kolostyak. Active funds struggle to beat the benchmark Greater opportunities and inefficiencies would seem to make emerging markets more conducive to active management than passive. However, this is not the ...

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Balanced funds: a more agile approach to regain attractiveness

Posted on 03.08.2023

According to Benjamin Bente, CEO of asset manager Vates Invest, the evolution of the financial and economic scenario has made it necessary to rethink the approach of balanced funds in order to make them attractive again in the eyes of investors. His analysis was also published in 'FONDS Professionell'. Inflation and high interest rates: a potentially structural condition Bente believes that the current economic and financial scenario is characterised by structural inflation and interes ...

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ELTIF: Retail investors conquer private markets

Posted on 20.07.2023

European Long-Term Investment Funds (ELTIFs) give retail investors access to alternative investments and private markets (Mutual funds – what are they?). But what is it all about? The risks of alternative investments and private markets Uncertainty in the financial markets has led more and more investors to seek alternative sources of return and diversification for their portfolios, such as alternative investments and private market products. These investments are almost exclusively for ...

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Better performance for low-volatility funds (with one exception)

Posted on 23.06.2023

Low-volatility funds have outperformed their higher-volatility counterparts over the past 18 months. This is according to Morningstar analysis presented in an article by Valerio Baselli. The average outperformance of low-volatility funds Morningstar's analysis clearly shows that low-volatility funds have outperformed higher-volatility funds in 2022. This was also the case in the first six months of 2023, with the only difference being that the average performance was positive compared to t ...

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Three ways of investing in balanced funds

Posted on 20.06.2023

Balanced funds are investment funds that follow an asset allocation strategy involving a combination of equities and bonds. They can be distinguished on the basis of the distribution of asset types (may be more weighted towards equities or bonds). Shares in these funds can also be used to perform different functions within an investment strategy. Investment Strategies and Balanced Funds As Janus Henderson (JH) points out, any investment solution can only take into account the objectives and ri ...

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Active funds: beating the market and paying back is difficult, but not impossible

Posted on 07.06.2023

Difficult as it may be, active investment funds have the potential to generate alpha and complement the system of capital flows to companies through markets.   Active funds can generate alpha and overcome management costs ETFs have become increasingly popular with investors in recent years, and the data bear this out. As Morningstar notes, the share of index funds in total assets has risen from 19% in 2013 to 38% in 2022. Low costs and better average performance over the medium and l ...

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