What you need to know about collective investments

collective investments

Do you want to improve the return on your savings? You can opt for a collective investment (UCI), that is to say a fund or a sicav, invested in securities such as shares and bonds. The essentials to know before making your choice.

gement company

There are two categories of collective investments, i.e. UCIs: UCITS (UCIs in transferable securities), which are marketable throughout the European Union, and AIFs (alternative investment funds) which are other collective investments marketed in France.

UCIs can take the form of FCPs or sicavs:

The sicav (investment company with variable capital) is a public limited company with variable capital which issues shares as subscription requests are received. By opting for this UCI, any investor who buys shares becomes a shareholder and can express his views on the management of the company at general meetings and/or present his candidacy for the board of directors.

The FCP (mutual fund) is a co-ownership of transferable securities that issues shares.

There are general-purpose funds and specialized funds such ascapital investment (FCPR, FCPI, FIP), THEcivil real estate investment companies (SCPI)and thereal estate collective investment undertakings (OPCI), forest savings companies (SEF), fixed capital investment companies (Sicaf), funds of alternative funds and investment fundsemployee savings(FCPE, SICAVAS).

A UCI can periodically distribute the income from its portfolio securities (distribution UCI) or reinvest it (capitalization UCI). The same UCI may hold distribution and capitalization units.

AMF approval

The AMF approves management companies as well as UCIs and monitors them during their life. Management companies must comply with management and investment rules. The AMF verifies the information provided on the regulatory documents. UCIs governed by foreign law are not approved by the AMF. They can nevertheless be marketed on French territory by virtue of a European passport and after notification to the AMF. Please note: AMF approval does not in any way constitute a subscription recommendation.

An accessible and diversified investment

The very numerous fund categories can meet a variety of savings needs and are accessible from small amounts. You can easily access, without having to build it yourself, an already diversified portfolio. Funds can be a suitable solution for savers who do not have the time or the knowledge toinvest directly in the stock market.

A wide choice of investments

There are a very large number of funds, of different types, and presenting more or less high levels of risk and return. They respond to various strategies and investment horizons: for example by investing in certain types of assets (equities, bonds, real estate, etc.), in certain geographical areas (Europe, the United States, Asia, etc.) or certain economic sectors (pharmacy, luxury, construction, etc.).

An opening on many markets

Investing in funds gives you access to markets that are not readily available, such as the bond market. You also have the option of investing on foreign stock exchanges which are also more difficult to access directly and which require special expertise for direct investment.

How to invest in mutual funds?

GOODchoose a mutual fund, it is above all to understand its potential return and its risk.

Choose the type of fund that interests you for its potential return or for its benefit in terms of diversification.

Make sure the recommended investment term matches your investment horizon.

The key information document (KID)

To choose a fund, read the documentation provided and in particular the DIC. It provides, in 3 pages, the information necessary to better understand each investment: investment strategy, risks, costs, performance scenarios, etc. standardized, this document makes it possible to play the competition between different funds. To better understand the DIC and the information it contains, see ourdedicated guide.

Buying and selling funds

UCIs are offered by distributors (banking networks, online banks and brokers, financial investment advisers, etc.) or by the management company and are housed on aaccounts titles, andPEAor in the form of units of account in alife insurance. To buy or sell UCI units, you must use the services of these financial intermediaries and indicate the number of units you wish to buy or sell.

The purchase or sale price of a Sicav share or an FCP unit is determined by two elements: the net asset value and the costs. The net asset value, ie the price of the UCI, is calculated and published by the management company. She is alsoavailable on the AMF website.

Consult the DIC and the prospectus of the mutual fund to find out how often the net asset value is published (daily or otherwise), how it is calculated andthe cut-off time for transmission of the buy or sell order.

Namely : the purchase or sale price of the UCI unit is determined from the net asset value known as the “unknown price”, i.e. the value calculated after the time or the deadline for centralization of orders. It cannot therefore be known in advance. Think about it when you place your stock market orders foravoid disappointments

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