Every investment is made with the objective 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 feeling of volatility or, at least, uncertainty. First of all, before determining where the best investment fishing grounds are truly located for this second half of the year that we have just begun, we must take into account what factors 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 known, some factors have led to an acceleration of rate increases which, in turn, have provoked, in reaction, the ECB’s determined fight to ensure monetary stability. All this has been reflected in skyrocketing profitability graphs in fixed income investments.
Although inflation is already subsiding on a global scale and many are beginning to affirm that the upward cycle of rates could stabilize towards September, the truth is that the circumstances continue to make this type of investment tremendously attractive. In our country, we also see a certain slowdown, which does not prevent high levels of inflation from continuing. 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, 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 financing operations at 4%; those related to the marginal credit facility by 4.25%; and the deposit facility by 3.50%. At the time of writing these lines, the 12-month Euribor stands at 4.147% and the 10-year Spanish bond yields 3.27% annually, which allows us to infer that, although there could be a ceiling for inflation, More defensive assets continue to be a good investment option.
However, the presence of interest rates close to their maximums should not make us overconfident. In a market as complex as that of fixed income, it is essential to have 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 interest rates today.
Among the various alternatives, funds with a defined maturity 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 profitability through the generation of 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 focuses on investment grade quality bonds, and can reach a maximum of 20% in high yield securities.
This product has a risk level of 2 (out of 7) and an average rating of BBB (which indicates that the risk is low and the issuer’s ability to meet its obligations is adequate), according to the average of the ratings available from the Standard agencies
Those who are not risk-sensitive can opt for target date funds with a majority investment in European Union public debt, which offer somewhat less profitability, but have even lower risk. Likewise, to manage liquidity, monetary fund 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 most conservative fixed income, we must also highlight guaranteed funds. After the success of the launch of fixed-return guaranteed funds, from the last quarter of 2022 until the end of April of this year, with four funds that have accumulated close to €2.8 billion, it is planned to continue with the launch of variable-return guaranteed . 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, Banco Sabadell began, on June 12, the marketing of its first guaranteed variable return fund, the Sabadell Capital Extra 1. It is a fund for just over 2 years, at whose maturity it allows the client 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 fee.
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 seeking the highest possible profitability – within our investment profile – for our money.
