Independent Financial Advisor and Co-Founder of Affari Miei
November 13, 2023
Arca Coupon Attiva Plus 2027 (ISIN: IT0005557621) is a mutual fund managed by ARCA Fondi SGR, the branch of BPER Bank which deals with asset management on behalf of the various subsidiaries of the group.
If you have been offered to invest in this product or you have realized that it is part of your investment portfolio managed by the bank, it is very positive that you have decided to seek information independently. Be a conscious investor it means first of all knowing where your money is going.
In this guide I will provide you, first of all, with the information necessary to exactly understand the characteristics of the fund. To do this we will rely on official documents such as the KID and product prospectus. After that I will also give you an honest opinion: I have no conflict of interest with this product, so I have no reason to speak about it particularly well or badly.
This article talks about:
Arca Fondi SGR: the fund manager
Arca Fondi SGR is an asset management company that belongs to the group BPER Bank. It deals with the management of investment funds and the main managed savings services offered by the BPER group, including capital accumulation plans (PAC) and savings investment plans (PIR). Furthermore, since 2023, the company has opened a private equity branch to also deal with investments in startups and promising unlisted companies.
The company currently has under management over €30 billion, which makes it one of the most important asset management companies in Italy. Furthermore, it is one of the most active in the management of funds that specifically deal with investing in ESG instruments, to promote environmental sustainability and climate transition.
Characteristics of the Arca Cedola Attiva Plus 2027 fund
Arca Cedola Attiva Plus 2027 is an open-ended mutual fund distribution with a fixed maturity. This means that:
Anyone can participate in the fund, investing and disinvesting at any time; The income that the fund obtains by investing is distributed periodically to investors; There is a specific date when the fund will be dissolved, in this case 2100. Did you expect it to be 2027? Surprise!
All capital is invested exclusively in bonds, as the word “coupon” in the name of the fund suggests. The product was launched in October 2023, and the distribution period will continue until the end of the year. ARCA’s goal is to capture the high yields that bonds are paying right now by helping clients gain exposure to fixed income instruments from different nations.
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What he invests in
The fund invests in bonds from G10 countries, denominated in the country’s local currency (therefore presents exchange rate risk). The. will be active until 29 December 2023 subscription periodduring which the capital will be invested in very liquid and short-term monetary instruments.
Once the subscription period has passed, the fund will begin to invest the capital according to the actual strategy for which it was designed. This strategy involves investing primarily in government bonds issued by large developed nations, but the managers reserve the possibility of also investing in bonds corporate -i.e. issued by private companies- and in instruments with a high risk and return profile. Since it is a flexible fund, the manager has a lot of freedom in choosing the bonds to which to allocate the capital under management.
The benchmark
The “benchmark” represents the reference index of a fund. Funds usually have a benchmark that includes several financial instruments and managers can buy and sell only those instruments, giving investors an idea of where their money will go. It also allows you to compare the returns obtained by the managers with those of the index, to understand if they are doing a good job.
Arca Cedola Attiva Plus 2027, like many other flexible funds, It doesn’t have a benchmark. The managers only indicate that they want to invest in bonds from G10 nations, but within this space they maintain total freedom.
Subscription method and revenue distribution policy
The fund has several classi. They are essentially different versions of the same fund, which differ only in the type of commissions applied and the minimum investment. In the case of the “P” and “R” classes, the minimum investment is 100€; in the case of class “F”, the minimum investment is 10.000€. The investment can be easily made through the financial consultants of the BPER Banca group and the SIMs that work in partnership with it.
This product can be subscribed to either individuallyor as part of a product of managed savings broader such as a PIR or PAC. Both subscription and disinvestment can be carried out at any time.
Regarding the distribution of proceeds, the fund provides that the earnings obtained from the coupons are distributed to investors every 6 months. Distributions will take place on June 30 and December 31 of each year, starting in 2024.
Risk profile
The fund’s risk profile is identified by a score of 2 is 7. Considering that 1 is the lowest risk score, 2/7 still indicates a very conservative risk profile. Not exactly a product suitable for those looking for long-term investments that offer the maximum potential for share appreciation, but valid for those who are unable to tolerate high temporary losses.
The detention period recommended by Arca is 4 years. However, it must be remembered that the fund will not only last 4 years: this is just the minimum time the manager recommends remaining in the fund.
Costs
Costs are a determining factor in the choice of instruments to invest in, and they are even more so when evaluating instruments which tend to be very expensive such as mutual funds. Overpriced products can make you lose money tens of thousands of euros and erode your returns disproportionately over the years, without you even realizing it.
If this concept is not totally clear to you, I advise you to download our free report in which we explain how overly expensive products can “silently” devour your assets.
Moving on to the costs linked to Arca Cedola Attiva Plus 2027, these depend on the class of fund in which you choose to invest.
Class
Management fee
Additional fees
Entry costs
Exit costs
P
0,80%
0,056%
0%
0%
R
0,45%
0,056%
1,20%
1,20%
F
0,60%
0,056%
0,80%
0,80%
The “additional commissions” are made up as follows:
0.022% to reimburse transaction costs incurred by the fund; 0.034% for the calculation of the odds.
Important to note that i exit costs are only applicable until 31 December 2027. This is why the fund contains “2027” in the name: to encourage investors not to exit the fund for at least 4 years, the manager applies an extra commission to those who subscribe to the fund and he doesn’t keep it in his portfolio at least until then.
Performance scenarios
Below I’ll show you the ones performance scenarios indicated in the Arca Cedola Attiva Plus 2027 KID. These scenarios are calculated automatically using mathematical models and also take into account the direct costs of the fund: consequently, they may vary between the various product classes. What I am reporting to you are the scenarios for the “R” class.
As you can see, scenarios are shown for both exit after 12 months and exit after the recommended 4 year holding period. The situation is as follows:
Scenario
Exit after 1 year
Exit after 4 years
Stress -21.97% -5.17% Unfavorable -14.73% -3.29% Moderate 0.43% 1.17% Favorable 7.27% 3.10%
Watch out for any additional costs which may result from the intermediation made by the placement agent. It is always a good idea to check what commissions are required by the consultant or SIM we turn to to invest in the fund and which are not directly indicated in the prospectus.
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Affari Miei’s opinions on Arca Cedola Attiva Plus 2027
They are My business we have never supported mutual funds much, regardless of the specific characteristics of Ark Active Coupon Plus 2027. This is because they are very expensive products, with an intrinsic conflict of interest between placer and customer, which leave no control to the investor and instead leave extreme freedom to the manager.
If you are interested in understanding more about these products, we have a free report in which we explain the critical issues of these products in detail: Reading it could help you save thousands of dollars every year.
In our investment strategy we prefer to use the ETF, which are just like investment funds but are listed on the stock exchange. They have extremely lower costs, are purchased independently and are limited to replicate an index rather than beating it: this usually means better performance and above all total awareness of how your money will be invested.
Who is fine with the fund and who isn’t
Due to its very flexible nature, Arca Cedola Attiva Plus 2027 is suitable for those who want to put themselves totally in the hands of Arca’s managers and blindly trust that they will make the best possible choices to invest our capital in bonds.
If you belong to the category of investors who prefer to delegate almost “blank” the management of their savings and you believe that the managers will do their best to protect your interests, then it can be an interesting product.
The bottom is not indicated for who:
It has an investment horizon of less than or much more than 4 years; He wants to invest his capital in shares to obtain a high potential for long-term appreciation; He believes it is important to have precise control over the management of his investments, without leaving much of the control in the hands of the managers; Look for a bond fund with low fees.
Conclusions
If you have decided to read this guide it is most likely because you were asked to invest in Arca Cedola Attiva Plus 2027 and you felt the need to get better information. This is a excellent start to become an informed investor and saver: seeking independent information can help you avoid bad choices.
If you are curious to discover the behind the scenes of managed savings, conflicts of interest and the very high costs of open-end mutual funds, I recommend you download and read our free report in which we review all their critical issues.
In case you are interested in finding out more about how Affari Miei approaches the world of personal finance and investments, instead, you can start here.
Before saying goodbye, I also want to leave you a few things guide that you can read to broaden your knowledge:
See you soon!
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