With a balanced portfolio oriented for long-term savings, the SICAV – Optimize Invest Selection, launched in Portugal in December 2020, is now entering the Spanish market. Euroconsumers Invest supplies the advisory as a company dedicated to the financial market, which Spain's Securities Market recognizes.
As we announced one year ago, we intend to reach more consumers through a network of partners. So, today, we mark the completion of a new market, and we are thrilled to help Spanish investors to stop losing money on their short-term savings accounts.
In order to mark this important arrival to Spain, we spoke to Pedro Lino, Optimize Investment Partners' CEO, and Pedro Catarino, ECI's Senior Adviser.
EuroConsumers Invest (ECI): What is the SICAV – OPTIMIZE INVEST SELECTION?
Pedro Lino (PL): Optimize Invest Selection is a sub-fund of Optimize SICAV domiciliated in Luxemburg, and it replicates the strategy of Euroconsumers analysts and its recommendations. It is a multi-asset fund, diversified by country, sectors and currencies, with a global reach that intends to track the world economy's growth and position itself as the alternative to the lack of return on deposits and capital guaranteed products.
ECI: One year after its launch in Portugal, what can you tell us about the progress of this product?
PL: Although investors can buy the fund in Portugal through Optimize Investment Partners, we are not actively selling it in the country because we focused on creating a structure for a broader and international distribution with other countries offering the fund.
ECI: Who will provide the advisory for the Spanish investors?
PL: The fund has Euroconsumers Invest as a Portfolio Adviser, where the recommendations of its analyst teams incorporate the investment strategy. Optimize Investment Partners acts as the Investment Manager. We will not provide any specific advisory for retail investors.
ECI: Where can the Spanish investors buy the SICAV – Optimize Invest Selection?
PL: In Spain, the fund is currently offered by Banco BiG. You may find more information from their website at www.bancobig.es.
ECI: What are the differences between the Portuguese and Spanish markets?
PL: Spain has a desirable tax regime for investors called the traspaso regime, an incentive for investors to use investment funds as saving accounts. They are only taxed if they do not reinvest their capital gains, which means that a Spanish investor can change his strategy by selling a fund and buying another one and not paying taxes on the capital gains. This deferral acts as an incentive to continue to invest.
The Spanish investor also has a more "risky appetite" even after all the financial troubles they have gone through.
On the other hand, the Portuguese investor is more cautious, and unfortunately, it does not have the deferral of the tax regime. If he wants to change a strategy, he will be subject to capital gains tax on the selling fund, and therefore the reinvestment will be lower. A couple of years, when we look forward, they lose the compounding effect because of taxes, which makes the difference when looking at a 20yrs time horizon.
There is a lack of understanding of how financial markets work and contributes to the preference of deposits. Family's deposits account for about 80% of the Portuguese GDP and yield about zero per cent.
ECI: What are the expectations for this product entering Spain? Meaning, what are the forecasts in terms of product selling targets?
PL: We have high expectations as the product fits the Spanish investor. The fund is very balanced (45% Stocks/ 55% bonds), diversified by country, sectors, currencies, and is a VAR of 10%, meaning that theoretically is loses 10% once every 100 years.
By investing in this product, investors and families are buying the auto rebalancing of Euroconsumers strategy, the independence of Optimize, decreasing their worries, benefiting from the compounding effect, and paying lower fees than having the portfolio in an institution and, and finally having more time for themselves.
EuroConsumers Invest: What makes this SICAV unique regarding other financial products available in Spain?
Pedro Lino: We have a unique product that results from the expertise and independence of Euroconsumers Invest and Optimize Investment Partners, where a product is designed to meet family's needs – increasing their returns on their savings. Over the last and subsequent years, those who do not search for long-term investment alternatives will face the devaluation of their savings, having less purchasing power as interest rates will stay at lower levels than inflation.
"Spain has a desirable tax regime for investors", Pedro Lino (CEO - Optimize Investment Partners).
The experience of Euroconsumers Invest
Using more than 30 years of expertise, Euroconsumers Invest and its partners have a key role in providing advisory to all investors. We spoke to Pedro Catarino, ECI's senior adviser and Board Member.
ECI: Euroconsumers Invest (ECI), along with Tree Family Office and within PROTESTE INVESTE scope, has provided advice to the SICAV – OPTIMIZE INVEST SELECTION in Portugal. Can you tell us how the product is developing?
Pedro Catarino (PC): We started implementing the allocation of the SICAV – OPTIMIZE INVEST SELECTION in 2021, following the guidance of the investment consultancy company for the provision of advisory services to other market segments and with ready-made solutions.
In terms of performance, the fund has been behaving well with a cumulative gain since the beginning of the year of 5% in a strategy defined for a moderate risk profile. In terms of volumes, the fund has also been growing sustainably.
ECI: How did this product deal with the pandemic period?
PC: The pandemic period brought nervousness to the markets and a challenging new economic environment. Nonetheless, the short term impact and the needed monitoring and adaption of our strategy privileges long-term investments - based on a geographical approach encompassing international bond and stock markets - and to invest in different markets - through mutual funds or ETF's keeping costs at a reasonable level. Therefore, our approach and diversification generated good results taking into consideration the risks. For instance, our exposition to Russian Stocks or US High Yield paid off quite good. The same goes for a more defensive market like the Swiss market.
ECI: Recently, ECI started its activity in Spain. Is this the first step for internationalization?
PC: ECI is taking on the internationalization strategy decided in 2020 to grow and fulfil its purpose amid the pandemic. As so, we asked, as a first step, the freedom to provide services to Spain, Belgium, and Italy. Moreover, we benefit from two movements: our customers and partners making an international expansion. In this sense, we started with the Optimize Invest Selection Fund's advice, which is now in distribution in Spain, an important milestone of this journey.
A second movement is the acquisition of new contracts with other counterparties. At this moment, we are working in straight collaboration with different partners to communicate and present the added value of the services. Soon we will give more news about the development of this channel.
"ECI is taking on the internationalization strategy decided in 2020 to grow and fulfil its purpose amid the pandemic", Pedro Catarino (ECI's Senior adviser and Board Member).
About the product
The SICAV - Optimize IP Invest Selection has no subscription or redemption (exit) fees. With a daily quotation, there is no associated penalty. Clients must request the cancellation through their financial intermediary. The SICAV - Optimize IP Invest's primary goal is to provide all investors with an alternative to safe and risk-free deposits.
How to apply
The SICAV - Optimize IP Invest Selection is available on the Optimize website and the Allfunds platform. It is available in Portugal and now in Spain, through Banco Big, as mentioned above.
Euroconsumers Invest wants to help its partners increase the geographical scope through distribution partnerships with entities from different countries giving adequate and balanced advice using their methodologies.