Investing is for you too

An investment fund is a Collective Investment Institution, a product where many people or companies, called unitholders, invest their money together.

• The Spanish National Securities Market Commission supervises these funds.
  
• The management company manages and represents the fund and decides where to invest the money, for example in different assets and financial instruments.
• This investment can result in gains or losses, depending on how the financial assets and instruments (investments) perform in the markets.
• The unit of investment is the share.
• The fees payable by investors are specified in the fund's legal documentation.

The characteristics and risks of investment funds should be taken into account before investing in a fund. You can read more about funds below:

• Subject to supervision
  In Spain, investment funds are investment products that are regulated by the Collective Investment Institutions Law and its implementing regulations. The investment fund assets are managed by experts who invest in different assets and are subject to the control and supervision of the Comisión Nacional del Mercado de Valores (CNMV).
  
• Diversification and access to markets
  An investment fund invests in different assets, sectors or markets that behave differently in the same market situation. These investments are made according to a series of rules that are specified in their legal documentation. Even when the fund follows these rules, consistently earning money cannot be guaranteed; there will sometimes be losses.
  
• Liquidity
  Generally, those who hold shares in a fund can withdraw their money from the investment whenever they wish. The value they will receive will depend on how the asset has performed throughout the investment period, which could lead to gains or losses, net of any applicable fees.
  
• Taxation
  Redeeming the shares in an investment fund will result in a capital gain or loss, according to the difference between its actual net asset value and purchase value. If it were a capital gain, it will be subject to a withholding and must be added to the savings tax base on the annual income tax return.
  However, if a transfer is made between investment funds that meet certain requirements (e.g. being an individual resident in Spain), this transaction will not be taxed at that time but will be taxed when the units are finally redeemed.
  
• Professional management
  The investment funds are managed by a management company that makes decisions involving the investments that will be part of the fund, and is responsible for its management, administration and representation.
  

Risks

The most common risks associated with investment funds are:

• Market risk: this is a general risk inherent to investing in any asset. The value of these assets depends on the conditions of the financial markets and the economic performance of the issuing companies, which are affected by the global economic situation and by each country's political and economic factors.
• Credit risk: There is a possibility that the entities issuing the assets in which an investment fund invests do not pay the interest or return the invested capital.
• Currency risk:  There is a possibility that, as a result of investing in assets in currencies other than the currency of the share, a risk is incurred from fluctuating exchange rates.
• Other risks: This information can be consulted at any time in the legal documentation of each fund.

Generally speaking, any person or company can invest in an investment fund.

However, before doing so, you should read the fund's legal documentation to find out whether you meet the specific requirements for investing in each fund.

Education is essential for anyone who wants to start investing. It is important to learn some fundamental concepts about investment funds that will help you on your investment journey. 

This knowledge is key to making informed decisions.

• Unitholders
  Those who hold units in an investment fund and also have significant rights. These rights include:
  - Redemption of their shares.
  - Free right of withdrawal, i.e. no redemption fees, if there are major changes in the fund's characteristics.
• Shares
  Represents each of the equal parts into which the assets of an investment fund are divided. These are the parts that are bought and sold when you want to subscribe to or redeem an investment fund.
  
• Net asset value
  The net asset value of an investment fund is the unit price of each share. It is calculated by dividing the total assets of the fund by the number of units existing at the time of calculation.
  The fund's management company is responsible for calculating and publishing the net asset value of all its funds on a daily basis. However, in some types of funds, this calculation can be carried out less often.
• Fund assets
  It is the total value of the assets held by a fund, and it is calculated according to the market prices of the assets and real-estate securities that on that date are part of the fund portfolio. Most of these assets are traded in organized secondary markets. Fees and expenses are deducted from this value.
  
• Management company
  Entity that manages, administers and represents the assets of the investment fund. It is responsible for investing the contributed capital in different financial assets, such as:
  
  - Fixed-income
  - Equities
  - Derivatives
  - Bank deposits, amongst others
• Depositary Entity
  Entity hat looks after the fund's assets and oversees the management company's activity.
  
• Returns
  The returns from an investment fund is the performance obtained over a particular period with the amount invested in a fund.
  The simplest way to calculate the yield, or returns, is as follows: Rp = (VL1 - VL0) / VL0
  Where:
  
  - Rp is the returns of the fund during the measurement period.
  - VL1 is the net asset value of the fund at the end of the period.
  - VL0 is the net asset value of the fund at the beginning of the period.
  
  On BBVA's website, www.bbva.es, you can see the fund's returns over different periods of time.
  Remember, past performance does not guarantee future results.

• ISIN
  A unique alphanumeric code that internationally identifies an issue or financial instrument, assigned by the National Securities Codification Agency (ANCV), which reports to the National Securities Market Commission (CNMV).
  
• Subscription
  
  Purchase of shares in an investment fund.
  
• Redemption
  Sale of shares in an investment fund.
  
• Asset classification
  The main financial asset classification distinguishes between fixed-income, equities, monetary assets and alternative investments:
  - Fixed-income assets are issued by public administrations and companies. Those issued by public administrations are usually of lower risk as they have strong financial backing. These entities commit to return the invested capital after an established period, together with a pre-determined return. Fixed-income assets include the following: treasury bills and commercial papers.
  - Equity assets are a type of investment where there is no guarantee of return on the invested capital or profitability. It is even possible for these returns to be negative, which means that you could even lose the money invested. This is because the returns from equities depend on a variety of factors, such as the growth of the company being invested in, its economic situation, the behavior of the financial markets, etc. Stocks in publicly-traded companies are the main example of these equities.
  - Monetary assets are those issued in the short term, such as treasury bills, commercial paper or bank commercial paper. These assets are characterized by high liquidity and little to no risk.
  - Alternative investments are those that seek to exploit market inefficiencies by focusing on non-traditional assets and investment strategies.
• Risk indicator
  A fund's risk level is measured on a scale of 1 to 7, where 1 is the lowest level of risk. The theory goes that the higher the risk, the higher the potential return.
  It is important to note that category 1 does not mean that the investment is risk-free, but rather that compared to other categories, the risk of that product is lower.
  
• Management and depositary fees
  The first fee is charged by the fund manager as remuneration for its services. This fee is accrued daily and is implicit, i.e. it is already deducted from the net asset value when units are subscribed or redeemed. It can be calculated based on the following:
  
  - Assets.
  - Returns.
  - Or both variables.
  
  You should check the fund's legal documentation to see if different fees apply depending on tenure or other parameters. For Spanish investment funds of a financial nature, the limits are: 2.25% if calculated on the assets, 18% if it depends on the returns. If both are used, it cannot exceed 1.35% of the assets or 9% of the results.
  The second is the depositary fee, which is charged by depositaries to the investment fund for the administration and safekeeping of portfolio securities. This is also accrued daily and is also implicit. For Spanish investment funds, this fee may not exceed 2 per thousand per annum of the assets.
  
• Redemption fee
  This is the fee that the management company charges each shareholder when they divest from the fund, whether via redemption or exit transfer. This fee is explicit and is calculated as a percentage of the amount redeemed.
  It cannot exceed 5% of the net asset value of the reimbursed shares. It is important to consult the fund's legal documentation to see if different fees apply depending on tenure or other parameters.
  
• Subscription fee
  This is the fee that the management company charges each shareholder when they invest in the fund. This fee is explicit and is calculated as a percentage of the amount invested.
  It cannot exceed 5% of the net asset value of the subscribed shares. It is important to check the fund's legal documentation to see if different fees apply depending on the date of subscription or other parameters.