Value Forget Elitism And See Need To Sell Funds Like Bread
From being products aimed at clients with a certain level of equity and with financial knowledge somewhat higher than the average – enough to opt for investment vehicles other than those that their financial institution tries to sell them – to trying to raise the money the more customers, the better. As if a sublime bakery boutique was launching to sell bread in bulk.
For some time, the most recognized independent Spanish managers have been focusing their commercial efforts on attracting new investors, for which they are reducing the minimum amounts to be able to invest in their funds and also reducing the limits on periodic contributions.
The last has been Bestinver , which has recently announced the reduction of the initial minimum investment of its funds to 100 euros and the additional one to only 50 euros. This is not the first time it has done so, since at the beginning of the year it already applied this measure at Bestinfond, Bestinver Patrimonio and Bestinver Renta. Now it extends it to the rest of its range. A complete declaration of intent from the leading Spanish independent manager by equity volume, with more than 5,000 million euros in assets under management and a market share of 1.6%.
And in this way it equals the minimum amount required to that of other competitors such as Cobas or Magallanes Value Investors, the firm founded by Iván Martín, who also have the minimum entry in that amount.
The Acciona manager justifies its decision in that it helps to promote regular savings to investors after reducing the maximum annual deductible contribution in pension plans, which will be 1,500 euros, according to the Government announced last week.
And it joins firms such as Azvalor, the manager created by Álvaro Guzmán and Fernando Bernad, and Cobas, the boutique founded by Francisco García Paramés, which are also trying to pamper the participants of their investment funds.
The first has reduced to 500 euros the minimum balance to maintain in all its products to adapt “to the specific needs that our investors may have”, although the minimum balance to contract its products is still 5,000 euros; while the second has applied a system of gradual reduction of management commissions based on the length of stay of the participants , which can lead to pay only 1% to those who show more loyalty in the long term, to seven years.
Beyond rewarding or facilitating investment for its clients, there is also the idea of attracting a new type of investor, more used to comparing financial products and analyzing the cost it entails, taking into account that nowadays financial institutions are gaining more market share with discretionary management and the competition that passive management represents, apart from the emergence in recent years of new firms fighting for the same small piece of the pie of independent management.
Underlying this dynamic of reduction of the minimum investment and commissions also underlies the attempt to maintain the raising of money in some firms that find it difficult to have a much higher level of net flows, despite the fact that their main source of income is the retail customers.
This year is being a good example of this dynamic. Despite the fact that the appearance of the vaccines against Covid at the end of last year led to the rotation of investors towards the more cyclical values, a circumstance that has favored the profitability of the funds of these investment boutiques, the raising of money does not reflect these favorable winds . In fact, the opposite is true. According to Inverco’s September data, Bestinver has been one of the managers with the most net outflows of money, with a loss of ten million euros, behind Santalucía AM, which has seen almost 11 million come out.
And EDM, Metagestión, Cobas and Azvalor have followed, with amounts that are not very large (from the 6.8 million euros of refunds of the first to the 4.3% of the Paramés firm), but that add up to the constant dripping that accumulates in the year. Some of these firms justify these exits in that their alternative products or those registered in Luxembourg are attracting that money that comes out of their Spanish funds.