Investing in mutual funds - where to start? Investing in PIFs Investing in PIFs

In recent years, having visited the offices of several banks, I came across an active promotion of banking products called mutual funds or simple mutual funds. Employees very persistently offered to take advantage of the opportunity to invest in mutual funds and get high returns. Several times higher than the profit on bank deposits, with their very modest percentage - in the region of 5-6 per annum.

They showed various numbers, graphs of profitability and how much could have been earned if I had invested money a year, 2 - 5 years ago. In fact, the data was impressive.

Dozens of percent of profit in a year or two.

And immediately there was a desire to entrust their hard-earned money and take part in the pursuit of profit.

Mutual fund profitability for 2017

An article for those who are planning, planning, or have already invested in mutual funds.

Pitfalls and the main disadvantage of investing in mutual funds in Russia.

What is interesting about mutual funds

To begin with, let's analyze (remember) - what is it? And how will it be useful for you and me?

A mutual fund can be viewed as a common pot for all investors. Money is collected and various assets (stocks, bonds) are bought with it in a certain proportion. Each investor or shareholder has a certain share or share. In proportion to the invested funds.

Pluses of Pifs:

• simplicity;
• availability;
• wide diversification.

If in simple words, then to invest in mutual funds, you need to conclude an agreement with a management company (MC) and deposit money. And that's all.

The cost of one share is only a few thousand rubles. Anyone can become the owner (or co-owner) of the fund and receive a return in proportion to the funds deposited.

Buying one share for 2-5 thousand rubles, you invest in tens or even hundreds various companies... And not only in Russia, but all over the world. Want America, please. Germany, China, England or Japan. No problems.

Sounds tempting. If you want to simultaneously invest in most advanced economies, it's easy. True, this requires a little more money. But several tens of thousands can easily be met.

You can of course do it all yourself. Anyone can conclude an agreement with a broker and companies of interest.

But this requires a lot of money. So much money. Having spent more than one hour (or even several days) of your time additionally.

In mutual funds, they will do everything for you. Bought shares - received a package of the shares you need. And nothing else needs to be done.

Comparison of profitability

But don't be encouraged by the high returns. Markets are volatile. And today's profits are not guaranteed in the future. But that's not what we're talking about.

In order to understand how effectively your money is working, you need to compare the result with some kind of benchmark.

The easiest way to do this is by comparing index mutual funds. All management companies buy shares in the same proportion as they are in the index.

For example, the Sberbank-America UIF completely copies, which includes the 500 largest US companies.

Comparing the charts with other companies investing in a similar way reveals a curious picture.

Over long intervals, the yield varies greatly.

On the picture:

• Sberbank - red chart;
• Raiffeisen - green;
• exchange traded fund ETF - white.

On a scale X - percentage of profitability since the beginning of 2014.

Total Return is the final return on funds.

Annual Eq is the average annual profit.

Unit investment funds

What's the catch? Why is there such a difference in profitability? And a very significant one. Almost one and a half times!

The bank will not tell you about this. And even if they do, they will be so veiled that you will not pay attention to it as an unimportant point.

Three main factors affect the return of a fund (unit investment fund):

1. Legislation.
2. Costs.
3. Management strategy.

Legislation.

According to the law, the fund must keep part of the invested funds in cash. That is, this money is not used to buy assets. They just lie there.

When a client sells his shares, the fund pays out from this reserve. Part of your money does not work, but lies in the stash and waits for a certain Vasya Pupkin to come and demand to return his funds. The percentage of this "airbag" is small. But as a result, the real profitability of the fund itself decreases.

Commissions.

You will be charged not one, but three commissions !!! The main disadvantage of investing in mutual funds.

Moreover, employees who "talk" potential customers do not focus on this point. They speak briefly, necessarily adding the word "only ... ..".

So what are these costs?

Entrance fee. When buying shares, a certain percentage of the amount of funds or the so-called premium will be automatically deducted from all shareholders. It can vary from 1.5 to 4%. Depending on appetite and arrogance management company... On average, this is 3%.

Naturally, some of this money goes as a reward to the bank or employee “for selling the product”. That is, out of your pocket. You have not yet earned anything, but have already incurred expenses.

Is 3% a lot or a little?

Example. Let's say you have 100 thousand rubles. With this money, we bought shares of the fund. Unit investment fund for 10 years, showed an average profitability for the year 12%. During this time, the capital would have grown to 310 thousand rubles.

So? No not like this.

Having paid a 3% commission, you actually invested not 100, but 97 thousand. And the profitability must be calculated from this amount. Under the same conditions, you would have received 300 thousand. Having lost another ten as a lost profit.

One could close our eyes to this. If it was the only commission of the management company.

Exit fee. Or so-called discounts when selling shares. The management company buys out your shares at a discount. The percentage again depends on the appetite of the company and the terms of holding the shares. On average, 2 to 3%. Usually, no fee is charged (but not for everyone) when holding shares for more than 3 years.

What do we get?

We bought shares, lost 3%. Shares sold - lost 3% more. We invested money for 1 year. The fund earned 12% of the profit. Your net profit minus costs is only 6%.

In the ten-year period, from the example above, you lose another ten.

And one could close our eyes to this (albeit with difficulty). We can say that these were only flowers. The most interesting is ahead.

Management fee. This expense item includes the fees of the Criminal Code itself, and other costs. Summing up - we get from 3 to not modest 5-6%. This fee is fixed. And it is taken every year from the value of your assets. Regardless of whether the fund showed a profit or a loss.

Probably it would be more correct to pay the mutual fund for the shown result. Earned profit for clients - got a certain percentage. If not, then there is no need to pay.

But management companies think differently. And they pull off money from clients every year.

How does this affect our money? And on the bottom line?

With an average annual commission of 4%, if the fund earns 12%, the real return will be 8% per annum. You have lost 33% of your profit.

Putting all the costs together.

The conditions are the same. There are 100 thousand, the fund is growing at an average rate of 12% per year. Entrance fee (one-time) - 3%. Management fee (annual) - 4%.

In 10 years, instead of 310 thousand, your account will have modest ... ... 210 thousand rubles.

The profit will not be 210%, but almost 2 times less, 110%.

Additional Information... In the example, we have not yet considered the possibility of obtaining losses based on the results of the operation of the mutual fund. When the annual management fee is added to the resulting losses. We got a loss of 4%. We add another 4% commissions. And now the loss doubles.

Pitfalls and other hidden moments

To all of the above, you can additionally add a couple of hidden moments.

Purchase of "own" assets. This usually applies to bond funds. The bank issues debt securities. And the management company, working in conjunction with the bank, invests the investors' money in these “own” ones. Even if it is not spelled out in the management strategy.

Everyone benefits (except for the ultimate shareholders). The bank has successfully placed securities. The management company received a certain bonus for the repurchase of assets "needed" by the bank.

Advertising brochures. In offices, they like to show various pictures (graphs and indicators of profitability) in brochures. Their meaning is about the same. When investing in a mutual fund (name of the fund) on a certain date of the year and before …… .. a profit of 50 (100, 200%) was obtained.

Everything is simple here. A favorable period is selected for which the fund showed the maximum profitability (a year or two, and even only a few months). And this information is “fed” to clients. See what opportunities, what profits. Everything is good and wonderful with us.

No full disclosure. Clients almost never know where the fund actually invests money. The MC provides information once a quarter. The rest of the time for ordinary shareholders, everything is shrouded in a veil of secrecy.

The main goal of the mutual fund !?

One gets the impression that the main task of mutual funds is not to make a profit?

Management companies do not want to meet potential and existing shareholders. I'm talking about the annual cost in terms of fees charged.

But with them everything is just bad. For some reason, they are not decreasing, but increasing. Even in a highly competitive environment, among similar funds. Nobody is in a hurry to reduce the interest for management.

There is an opinion that the management company is trying to squeeze the maximum amount of money from clients.

In conclusion or alternative to mutual funds

Taking advantage of financial illiteracy (or not strong awareness) of the population, funds continue to lure depositors. Featuring beautiful pictures and graphics.

Telling that the whole world and especially rich people, everyone invests. And specifically, you don't need a lot of money for this. Just a few thousand. To start. But, of course, more is better.

And of course, they will definitely tell you what and where is better to invest for many years. Markets are volatile. But in the long run, everything grows.

This is partly true. But due to commissions, a person catastrophically lags behind the market for long periods of time. Losing almost half of their capital in a few years simply on trading costs alone.

The West has long understood this.

And one of the main factors for successful investment is low costs. For this, investors use ETFs.

The meaning is practically the same as that of mutual funds. Only with much lower annual costs.

In Russia, this market is just beginning to emerge. A little more than 10 funds are available so far. There are several thousand of them in the West.

Commissions in Russia - 0.9%. In year. And that's all. No more costs. The lowest in the country.

In the West, there are funds with annual commissions of 0.1% and even 0.02% per year. In which you can invest. But….

Many nuances can arise. Inconvenience and other related costs - translation fees, language barriers, brokerage costs, double taxation and other nuances.

At the end of the article, see a comparison of mutual funds, ETFs and the index itself, on the basis of which funds operate. Over the past few years.

The stock market remains one of the most affordable and profitable capital accumulation tools. However, not all novice investors have enough experience and sufficient amount to diversify to buy shares. Therefore, mutual funds are the most popular alternative stock market, since they allow you to passively invest in various Russian securities and other assets (gold, real estate or foreign shares) and get a good profitability.

The most profitable mutual funds at the end of 2018

Out of 247 open-ended funds, 175 projects closed the year with profit, and 76 allowed investors to receive income of more than 10% per annum, and 25 - more than 15%.

Naturally, the numbers are relevant if you invest from the beginning of the year. A significant part of the funds is subject to volatility, and by buying shares at the minimum of their value, one could earn much more.

At the end of 2018, the most profitable were mutual funds investing in stocks of developing countries and stocks of the technology sector.

Funds specializing in mixed investments (in portfolios mainly stocks and bonds) and purely "bond" have performed well.

For such conservative and risk-free instruments as bonds, this is a very good indicator (in in this case part of the portfolio consists of "junk bonds" with a large coupon yield, but low stability, incl. the funds received earnings due to balancing between assets and competent diversification).

Is it worth investing only in profitable mutual funds

Among inexperienced investors, it is believed that it is worth investing exclusively in profitable mutual funds. Therefore, they are looking for such ratings, trying to choose the fund with the maximum profit. But is it worth focusing on this indicator? Let's try to figure it out.

How the profitability of mutual funds is formed

Profitability means that the share price has increased from a certain value at the beginning of the year to another at the end. An investor who has bought a share at a lower price will sell it at a profit at the end of the year. However, the return in a certain year does not mean that the next investor will receive the same or close to it. There is a chance that by the end next year the share will return to the previous price or drop below.

Profitable mutual funds grow on a specific investment idea. For example, two years ago it was stocks of developing countries (mainly BRICS), as well as stocks of the technology sector (growth was provided largely due to the popularity of bitcoin). In 2018, this trend took off due to the loss of interest in cryptocurrencies, the outbreak of trade wars and a slowdown in the global economy.

For example, one of the profitable funds of 2017, China (MC Otkritie), showed negative profitability in 2018 - the value of a share fell from 2,272 to 2,182 rubles, and 2019 began with a slight increase to 2,220 rubles, but the prospects for growth are questionable due to tense negotiations on trade duties.

When choosing a mutual fund, it is worthwhile to rely on the profitability of previous years with caution. Analyze why the high profitability was obtained - competent management or the fund was just lucky?

If we take profitability as a key criterion, consider it in dynamics and over a longer period, at least for 3 years. This period is considered the optimal time for holding shares in ownership - the fund manages to work out both falls and rises, and gives an average return. It is important that when such shares are sold, there will be no need to pay income tax.

Mutual fund profitability rating for 2019

Statistics show that the three-year upward trend is provided exclusively by equity funds related to energy or representing a balanced portfolio of securities of the largest companies ("blue chips").

The strategies of these funds are conservative or moderate, the volatility is not too strong - the average drawdown does not exceed 20%. Consequently, we can count on the fact that in the next three years these mutual funds will demonstrate similar returns or are guaranteed not to lose in value.

How to choose the right mutual fund in 2019

If you want to make a profit in the long term, when analyzing profitability, pay attention to the following facts:

• Systematic profit - if from year to year investments work in a plus, the chances of a successful completion of the next year are great;
• Drawdown size - conservative strategies provide for drawdowns of no more than 5-7%, moderate - up to 15-20%, if the fund allows large losses, there are big problems with its management;
• Correlation with the benchmark - they should go on a par if the fund's profitability graph differs too much from the benchmark - this is an alarming signal indicating management problems - ideally, the mutual fund's schedule should break away from the index, but repeat it in general terms.

For reference: a benchmark, in simple words, is an asset by which profitability is assessed. Their role is played by selected securities or indices included in the portfolio of a mutual fund. For example, Sberbank Balanced UIF has been using as a benchmark since January 1, 2018 - 50% MCXCBITR Index / 50% MosExchange Index.

When analyzing the potential return of a fund, pay attention to the following aspects:

• Assets composition. The most stable and profitable funds are of a mixed type (bonds + stocks), investments in stock mutual funds are traditionally the most profitable, but their units are more volatile.
• Allocation of assets. It should be noted how diversified investments are and what are the prospects of the largest issuers. If there is an advantage, a stock that has fallen in price can pull the entire portfolio with it. This is true for bonds - it is one thing when a significant part of assets are government bonds, and another is the "junk" of the foreign market.
• Asset dynamics. Note how often managers “shake up” the portfolio, getting rid of disadvantaged issuers, whether the structure is left unchanged, whether new names are included or the composition of assets is not revised (alarming signal).
• Net asset value. If the NAV grows, there are more people willing to invest in mutual funds. The NAV has little effect on the profitability, however, the more funds at the disposal of the fund, the larger investments it can make - this increases the chances of a positive outcome. Plus, if a large investor withdraws his money, the manager will not have to urgently get rid of assets in order to pay him money - there will be reserves.
• Strategy. The most profitable is an aggressive strategy (investments in stocks or other funds), but the share value here has the greatest volatility. Investments in bond mutual funds bring a stable, but small profit. If it is important to preserve rather than increase capital, choose not the most profitable, but the stable projects themselves.
• Team. People control your money, so the professionalism of the managers is extremely important. If the team has several successful mutual funds under the control, then the one you have chosen will receive a good result with a greater probability. If a successful manager is at the head of a newly created project, this is a great chance to invest and earn money on its promotion.

With a short-term investment, you can count on super profits and invest in funds with a speculative strategy. But if you are looking for a long term, prefer projects with predictable and stable profitability.

Summary

In general, instead of trying to guess which fund will be the most profitable in the future and which mutual funds to invest in in 2019, it is better to make diversified investments in several mutual funds at once, perhaps even within the framework of one management company. For example, 3-4 bond funds, 2-3 stocks or mixed funds, and any recently created with a risky strategy.

Today we will talk about the real profitability of mutual funds and about what it depends on and what you should pay attention to when analyzing the fund chosen for investment.

Generally speaking, such a concept as "Profitability of mutual funds"is generic. Despite the fact that in certain analytical reports you can see a certain average value, for example, the profitability of Russian mutual funds for a year or Sberbank mutual funds for 3 months, you should not take this figure as something constant or applicable to all types of mutual funds.

Difference in profitability depending on the type of mutual fund

We have already analyzed it and we know that there are quite a lot of them. Since each of these types may have different investment instruments, then their profitability may be different.

Bond funds may show a small but stable return from year to year. Their profitability, as a rule, is not much higher than that of deposits in banks - 9-10% per annum.

Equity funds can show high profitability ( up to 100% per annum) with positive market dynamics, but there is also a great risk of “going into negative territory” if it falls.

These 2 examples remind us that an increase in profitability is usually associated with an increase in risk - don't forget about it!

What are the best options?

The best option for the risk / reward ratio may be mixed investment fundswhich have in their assets both high-yield (company shares) and low-risk (government bonds) instruments.

Also, if you are an expert in any industry and understand that it is at the start of its development, then you can use this “industry” type.

If we talk about general recommendations, then the best option would be that unit investment fund whose profitability is stable from year to year. Therefore, when analyzing funds, see statistics not only for the last 1-3 months, but also over a longer period: 1-3-5 years... If the dynamics are positive in general, this is a good indicator.

Real profitability of mutual funds

In this part, we would like to draw your attention to the concept of "real profitability" of mutual investment funds. When you see that any fund promises you at least 15% per annum, then you should know that the actual (net) profitability of this mutual fund will be lower.

Why is that? Because there are such moments when investing in mutual funds, such as:

Allowances.

Discounts.

Rewards.

Personal income tax.

Let's take a closer look at each of these points.

Surcharges for the purchase of mutual fund units

When buying a unit in a fund, very often you will have to pay a certain fee ( allowance), which can be different and usually depends on the amount of the first installment. On average, the premium for the purchase of a share may vary from 0.5 to 1.5% from the purchase amount.

Often than more amount purchases, the lower the% markup within the same fund.

Discounts when selling shares to mutual funds

Also, the net profitability of mutual funds decreases for you when you take profit by selling shares to the fund. One more fee will be included in this operation - sale discount.

The amount of this discount depends on the amount of time that you owned the units of the mutual fund. The longer the ownership period, the lower the% discount. Fee may vary from 0 to 3%.

Trust management fees

In addition to premiums and discounts, there is another type of fees when investing in mutual funds - this is rewards the management company, the depositary and “other expenses”. In total, these fees may be collected up to 2% from your income.

Personal income tax payment

If we talk about Russian mutual funds, then their management companies are tax agentswhich means the following: when withdrawing money you will be deducted from the fund 13% from the profit received for the entire time of investing in it.

From everything written above, the following conclusion can be drawn about the real profitability of mutual funds:

1. Your deposit and the final profit when investing in mutual funds can be reduced due to additional markups on the purchase of shares, discounts on their sale, as well as rewards.
2. Your net profit after all these fees when withdrawing money from the fund will be reduced by 13% - payment of income tax individuals (Personal income tax). In this case, you do not need to report separately to the tax office.

An example of profitability in numbers

Let's analyze a specific situation to make it clearer about the real profitability of the mutual fund:

let's say your deposit to the fund is 100,000 rubles and after 1 year (365 days) you decide to withdraw it;

a surcharge for this amount is 0.5%;

mutual fund profitability for the year - 25%;

365 days discount - 1%;

Personal income tax - 13% of profit.
When investing, your deposit is immediately reduced by the amount of the premium - 500 rubles: 100,000 * 0.5% \u003d 500; the actual contribution will be - 100,000-500 \u003d 99,500 rubles.

At the end of 1 year, your shares began to cost 25% more, which amounted to 124,375 rubles, including profit - 24,875 rubles. (124 375-99 500).

When you sell shares to the fund, you are charged a discount of 1,243.75 rubles (124,375 * 1%).

And the last deduction is personal income tax, which is taken from the net profit from investments (the amounts of allowances and discounts are deducted): (24 875-500-1243.75) * 13% \u003d 3007.06 rubles.

Total on your hands you will receive: 124 375-1243.75-3007.06 \u003d 120 124.19 rubles. And the actual percentage of the mutual fund's annual profitability will not be 25%, but 20.12%.

Reading 5 min. Posted on 11/19/2019

Investing in mutual funds (mutual funds) is gaining significant popularity. The main leaders were bond funds, which stand out with higher yields relative to bank deposits. Is it worth investing in such structures in 2019 and what you need to know before making a decision, about this below in the article.

What are mutual funds?

A mutual fund is a fund that, with the help of a certain company, manages trust assets formed from investors' finances. That is, each shareholder owns his own part of the property, which consists of shares.

UIFs are formed to generate income on the assets of the company's fund with the subsequent distribution of profits among investors. The company itself charges a percentage for the work of managing depositors' finances.

Is it profitable to invest in mutual funds in 2019: expert opinions

According to many independent financial experts, in 2017, the bulk of shareholders invested in bond funds. Thus, according to the Central Bank of the Russian Federation, 74 billion rubles were attracted to this segment. As for other types, the dynamics of investment there was, on the contrary, negative.

Most often, debt securities surpass ordinary bank deposits in terms of profitability. In addition, they stand out for their higher price stability. Accordingly, it is not surprising why more and more citizens tend to invest in funds instead of standard deposits. Also, over the past 12 months, according to objective data and the information of a number of experts, the rate on deposits in many banks in Russia fell by more than 1%.

According to the Central Bank of the Russian Federation, in December 2017, the average annual rate on deposits for individuals varied in the range of 7.33%. Despite the fall interest rate, the volume of household deposits in financial institutions is about 25 trillion. rubles and a downward trend in this indicator is not yet observed. Consequently, only a small part of depositors are looking for an alternative to today's deposits. ... Of course, their departure slows growth bank depositshowever, does not affect the decline rate.

“Unit investment funds have been the leaders in attracting finance over the past several years and at the beginning of 2019 this trend is only strengthening more and more”,

– notes the representative of "Raiffeisen Capital" Konstantin Kirpichev.

“The main reason for the great demand for them is the active inflow of investors from classic deposits to funds. In addition, they demonstrate stable dynamics and at the same time show higher profitability compared to bank deposits ”,

the expert notes.

Investments will continue to flow

In 2017, industry-specific equity funds were among the leaders. However, according to many surveyed financial analysts, this fact is unlikely to "spur" a sharp influx of money from investors in such structures. Most likely, bond funds will take the leading position.

"In 2019, bond funds are likely to remain in the lead,"

- says the head of the Sberbank department Vasily Illarionov.

“If this year the Central Bank will allow buying shares of its own mutual funds into its own account, then we can: provide the client with an independent choice of mutual funds; provide the investor with a diversified financial plan with complete list funds. Due to this, the structure of the tributaries will become multidirectional, and will also be able to reflect the objective ratio of targets and financial indicators activities. In addition, the real risk profile of the depositors will be clearly visible ”,

- he notes.

“Our funds are in the lead in terms of the amount of funds raised in 2018-2019. Thus, the cost of the main asset has increased almost 5 times over the past year. There are only several reasons for attracting such volumes of funds: due to low rates on deposits, citizens do not want to invest their money in banks, and therefore have to look for alternative sources for financing; bond market offers profitable terms for shareholders ",

- says Evgeny Zhornist, head of Alfa Capital.

“We also expect that the financial and credit policy of the Central Bank of the Russian Federation will be reduced to about 6.5% from the current 7.33% per annum, and as for bond mutual funds, for our shareholders, we plan to earn 10-11% per annum”,

What are the risks?

Many people invest in mutual funds because they know that this is, without exaggeration, the simplest and safest financial source without any pitfalls. On the other hand, mutual funds have certain risks.

The point is that the assets of mutual funds are placed in special depositories. They protect the shareholders' money and at the same time control the investment actions of the management company. That is, depositories are required for the management company to comply with applicable laws, and also work in the interests of depositors. Accordingly, in some cases, this can prevent the company from managing assets as efficiently as possible.

The main risk is that there is no 100% guarantee that the selected mutual fund will bring income to the shareholder ... This may happen due to the fact that the company does not effectively manage funds, the value of shares or bonds has fallen, and other factors affecting assets have affected. Consequently, the shareholder's profit depends not only on the correctly selected company, but also on the type of mutual fund itself.

Nesting your own money in mutual funds - this is a great alternative to classic bank deposits. In addition, mutual funds are completely transparent and do not require a good knowledge of the financial market or any action. On the other hand, any investment is always a risk, and therefore, in order to minimize them, it is very important for an investor to take a responsible approach not only to the choice of a management company, but also to the type of mutual fund.