The comeback in financial markets driven by good news about the effectiveness of the trials of Covid-19 vaccines has triggered the profitability of investment funds in November to 4.19% .
This is the best record in the historical series, with positive returns in all categories, especially those with greater exposure to stocks. However, many investors have not been able to take advantage of this comeback and have been left out of the rise, says Isabel Sánchez, financial analyst at Arquia Profin Banca Privada.
To avoid losing these opportunities, Araceli de Frutos, advisor to the Alhaja Inversiones fund , recommends being invested and warns that although the increase in profitability in the funds in November has been significant, it must be taken with “caution” because “it may be a trap move because some funds that have not done quite well during the year may have made up their results by the end of the year ”.
Faced with these good returns, De Frutos advises investors not to get carried away by their emotions when investing and not to go irrationally to the markets now so as not to miss possible rises , since “these market fluctuations must be taken in perspective ”And more if one takes into account that the pandemic continues to be the main catalyst and is not yet under control.
The increase in the profitability of the funds caused their volume of assets to increase by 9,700 million euros in November, to stand at 271,952 million, 3.7% more than the previous month. After this rise, investment funds “have recovered almost all of what was transferred in the first quarter of the year, ” Inverco sources point out .
It must be remembered that when the pandemic broke out in Spain there was a capital flight from investment funds that reached only 5,571 million euros in March. The comeback of the markets in November has also caused the average profitability accumulated this year by investment funds to return to the green numbers, reaching 0.37%.
Driven mainly by the categories of funds with greater exposure to stocks, such as national equities, whose profitability reached historical monthly highs, standing at 22.95 percent . These funds closed November with a net worth of 3,210 million euros. The international equity category was the second that offered the best returns to its participants, with a rise of 13.49 percent. Its average yield in the year exceeds 2.8%.
The third place in the ranking by profitability was occupied by passive management funds with a rise of 4.38%. And it is those categories with the greatest exposure to risk that will awaken the greatest investment appetite on the part of shareholders in the short term.
“Given the recent behavior of the markets, international equity funds should continue to attract the attention of investors,” says Isabel Sánchez. But everything will depend, according to the analyst, on how the pandemic evolves and whether or not the economic recovery is confirmed in 2021.
Flows, more outputs than inputs
Regarding subscriptions and redemptions, investment funds maintained the flat behavior of previous months in November, registering net redemptions of 160 million euros . They accumulate outflows of 970 million in the year.
The category of global funds registered the largest capital outflows with 231,584 million euros, followed by those guaranteed with repayments of 127,201 million and those of mixed fixed income and mixed variable income with 80,872 and 54,676 million respectively.
However, there were categories that obtained capital raising, such as fixed income, with contributions worth 188,949 million euros, international equities, whose subscriptions reached 139,945 million, and passive management, with 94,979 million.