All investment is made with the aim of obtaining a return, but how to get the most out of our money in a scenario like the current one, which in recent times has inevitably been marked by a certain sensation of volatility or, at least, uncertainty. In the first place, before determining where the best investment fishing grounds for this second half of the year that we have just started are truly, we must take into account the factors that determine the current situation.
In the world of investors, it is considered a practically immutable rule: when interest rates are especially high, it is very interesting to invest in fixed income, which, traditionally, tends to be much less volatile. As is well known, some factors have led to an acceleration in interest rate rises which, in turn, have provoked, as a reaction, the ECB’s relentless fight to ensure monetary stability. All this has been reflected in soaring profitability graphs in fixed income investments.
Although inflation is already subsiding on a global scale and there are many who are beginning to affirm that the upward cycle of rates could stabilize around September, the truth is that circumstances continue to make this type of investment tremendously attractive. In our country, we also see a certain slowdown, which does not prevent the continued existence of high levels of inflation. At the same time, we see how the measures adopted by the main central banks are causing a containment effect on price growth, unlike what happened in 2022.
In any case, the declines do not seem imminent. In fact, as of June 21, the ECB has increased rates by 25 basis points, placing those corresponding to main refinancing operations at 4%; those related to the marginal credit facility by 4.25%; and those of facility of deposit in 3.50%. At the time of writing these lines, the 12-month Euribor stands at 4.147% and the 10-year Spanish bond rents at 3.27% per year, which allows us to infer that, although there could be a ceiling for inflation, the most defensive assets continue to be a good investment option.
However, the presence of interest rates close to maximums should not make us overconfident. In a market as complex as that of fixed income, it is essential to have an active and professional management. Banco Sabadell, with the support of the asset management company Amundi, has a wide range of investment funds designed to take advantage of the opportunities offered by today’s interest rates.
Among the various alternatives, the funds with a defined expiration date (or target date) stand out, for which the Amundi group has specialized teams in the world of private fixed income. Throughout 2023, two funds from the Amundi Buy range have already been launched
This Fixed Income Fund, with a target completion date of June 30, 2028, seeks to achieve attractive returns by generating periodic income (with an annual coupon of 3%), and with the recovery of the initial investment at maturity. (unsecured), investing primarily in a diversified portfolio of corporate debt. The investment is focused on investment-grade quality bonds, and can reach a maximum of 20% in high-yield (or High Yield) securities.
This product has a risk level of 2 (out of 7) and an average BBB rating (indicating that the risk is low and the issuer’s ability to meet its obligations is adequate), based on the average of the available ratings of the standard agencies
Those who are not allies of risk can opt for target date funds with a majority investment in public debt of the European Union, which offer slightly less profitability, but have an even lower risk. Likewise, to manage liquidity, money market alternatives such as Sabadell Rendimiento are a very attractive option, since they manage to take advantage of the high interest rates offered by money market assets.
Within the more conservative fixed income, we must also highlight the guaranteed funds. After the success of the launch of guaranteed fixed-return funds, from the last quarter of 2022 until the end of April this year, with four funds that have accumulated close to 2.8 billion euros, it is planned to continue with the launch of guaranteed variable-return funds. . The latter, in addition to guaranteeing 100% of the initial investment, offer an initial return linked to the evolution of an underlying.
In this section, on June 12, Banco Sabadell began marketing its first guaranteed variable return fund, Sabadell Capital Extra 1. It is a fund with a term of just over 2 years, at whose maturity it allows the customer to receive 100% of the initial investment plus a 2% coupon and 50% of the average revaluation of the STOXX Europe ESG Leaders Selct 30 (which is the index that brings together the 30 leading European companies in environmental, social and governance terms, based on ESG indicators provided by Sustainalytics). Like the rest of the guaranteed funds, it will have quarterly liquidity windows with no redemption commission.
The team of professionals in charge of analyzing the markets and the economic situation in search of the best opportunities and the more than 30 years of experience managing funds make Banco Sabadell an ideal option for investing in funds, without unnecessary risks and always looking for highest possible return –within our investor profile– for our money.
