Conservative savers continue to face the dilemma of whether to keep their money in conventional deposits, generally low-remunerated, or try to make it profitable through an investment product. Choosing this last option always implies a little more risk, although there are financial products with high liquidity and security.
This is the case of monetary funds, which in recent months have gained prominence due to the boom in fixed income, since these instruments invest above all in very short-term public debt -such as treasury bills- and company promissory notes.
For the most conservative investor, “they continue to be a good alternative to deposits,” says Víctor Alvargonzález, an independent advisor. However, not all monetary funds are the same. A compelling reason, points out the founder of Nextep Finance, is that “bills are already close to the maximum level of profitability that they can give in the future”, so it is essential to choose funds that invest in bills with longer maturities, of around a year. “This is a very important nuance,” he warns, “because if interest rates start to drop and you have bought funds that have invested in one-year bills, you are guaranteed a high return for a year.”
In a context in which he does not expect the European Central Bank (ECB) to continue raising rates for much longer, the expert recommends investing for a longer term, between two and three years. And specifically to do it in bonds, in which fixed-income funds invest. An option that can give a higher return than the monetary fund but that also has greater volatility, for which reason Alvargonzález advises against it for a conservative investor profile. However, it would be recommended for those who have a higher risk tolerance. Likewise, at times like the present when the stock markets have a markedly upward trend, the most aggressive investor should consider reinforcing their commitment to equity funds.
In any case, despite opting for instruments such as monetary funds, you must never lose sight of diversification. For this reason, José Castro, founding partner of Newman-Fincoach and author of Objective: Wealth, advises allocating the part of the investment portfolio that requires little or no volatility to this product. In this sense, he maintains that “it is always advisable to keep a certain proportion of our investment in liquid assets, and especially when the money returns to earn not inconsiderable interest.”
Added to this, he argues, is that the tax treatment “is much more favourable” than the income assigned to the general tax base of the income statement, whose applicable rate can reach 47%, while the income from this type of Investment products are taxed on the savings tax base, with a tax rate from 19% to 28%. In addition, remember that investment in funds allows what is known as “tax deferral”, which allows the investor to accumulate capital gains in their funds -monetary and non-monetary- and can transfer the shares of one fund to another “maintaining the regime of fiscal neutrality”. In other words, taxes must only be paid based on the returns obtained at the time of sale.
However, when choosing a monetary fund, it is necessary to opt for the one that charges fewer commissions – “no more than 0.30%”, according to Alvargonzález-, since the net return obtained is low in relation to other investment products. investment, around 1.40% until July. “A monetary fund is close to covering inflation (1.9% in June and 2.1% in July), especially if it continues to fall in the coming months.” Despite this, “the return will depend on each fund,” he adds. And in some cases the expenses can make the profitability zero.
Lastly, experts recommend examining the history of the mutual fund before investing. In addition, it is important to ensure that the money can be withdrawn when needed without penalties or restrictions and to inquire about the credit ratings of the issuers of the assets. To reduce risk, it is advisable to look for a fund that has a diversified investment portfolio. Ultimately, if you do not have enough knowledge about investment, it is always recommended to turn to a professional