Independent Financial Advisor and Co-Founder of Affari Miei
November 30, 2023
It is worth investing in Ark Defense Active Fund 2027 (ISIN: IT0005505133)?
If you are asking yourself this question, the fund was most likely proposed to you by your trusted advisor, or you are simply interested in investments and are trying to clarify: you are interested in knowing the characteristics of different mutual funds in order to then make the best choice for you and your investment strategy.
Today we will analyze the Arca fund through the detailed analysis of KID (Key Information Document) and we will focus on the most important aspects of the fund, to better understand what characteristics to consider and above all what are the advantages they disadvantages of an investment made in mutual funds.
Enjoy the reading!
This article talks about:
Arca SGR: a presentation
Arca SGR is a consolidated savings management company with solid experience, founded in 1983 and based in Milan. The company stands out for offering excellent products and services, aimed at a diversified clientele.
The structure of Arca SGR is based on a network of 100 entities selected from credit institutions and financial companies, responsible for the placement of all the funds managed by the company. This network extends through over 8,000 branches and financial promoters, reaching approximately 860,000 subscribers to the funds managed.
An important point in Arca’s strategy is the commitment towardssustainable investment.
In 2019, Arca Fondi joined the United Nations principles for sustainable investment (UNPRI). This choice reflects Arca’s belief that saving can have a positive impact on the environment and society, helping to build a more sustainable future. This commitment demonstrates the social responsibility of Arca SGR and its vision aimed at making a positive contribution to the environment and the community in which it operates.
Profile of the Arca Difesa Attiva 2027 fund
Arca Difesa Attiva 2027 is a mutual investment fund of the category flexible, and is aimed at investors who are seeking moderate capital appreciation with a low risk appetite. Their objective is to preserve the invested capital over the reference time horizon.
The objective of the fund is in fact to achieve capital growth, while minimizing the probability of loss of invested capital, using particular management techniques.
The day the fund share value is protected is November 12, 2027, which would also be the fund’s maturity date.
However, I would like to point out that the return/protection objective does not guarantee the return of the invested capital nor the minimum return on the financial investment.
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What does the fund invest in?
The Arca Difesa Attiva 2027 fund invests mainly in financial instruments relating to the short part of the yield curve: we therefore have bank deposits and liquidity instruments.
The fund also invests in bond instruments of sovereign issuers and international bodies of European countries, which are denominated in euro.
The investment in equity instruments is at most 100%.
As regards the geographical area of investment, it is Europe.
How does the fund pursue its protection objective? By investing in bond instruments mainly issued by the Italian State with a maturity close to that of the fund’s investment cycle.
The benchmark
Now let’s see which parameter the fund refers to: the benchmark in fact it is an index that is taken as a comparison to see the performance of the fund and to have a sort of overview over time.
In this case the management style is activeand the fund does not reference any particular index.
Risk/return profile
Considering the potential risk of an investment is important, as risk exposure is one of the first things to consider.
If your strategy is oriented towards protecting capital, you will certainly not be able to opt for a very risky fund, just as, on the contrary, if you have a very long time horizon and want to obtain higher returns you will necessarily have to choose a fund with a higher risk. at least equal to 5.
Ark Defense Active 2027 has a risk level of 4 on a scale of 1 to 7, so we are on a medium risk.
Subscription, disinvestment and distribution of proceeds methods
It is possible to subscribe to fund shares at any time, either through a single payment (PIC) of a minimum amount of €100, or with periodic investment (PAC), paying minimum amounts of €100. Subsequent minimum payments must also be €100.
There are no particular instructions for disinvesting, you can do so at any time by asking the SGR for a refund of the value of your shares.
However, you should know that at the end of the time horizon, the Fund will be merged into another fund of the SGR.
The proceeds realized are managed with the accumulation method, which means that they are not distributed among investors but are reinvested in the fund’s assets itself.
The costs of the Arca Difesa Attiva 2027 fund
Check the charges to bear has always been the most important thing to do, as they are the costs that impact returns and which can contribute to determining the positive or negative outcome of your investment.
The cost table can also be useful for comparing two different funds and choosing the most convenient one.
The subscription fees are equal to 0%, while the reimbursement costs amount to 2.50%.
As for the current expenses which are withdrawn from the fund in a year and which refer to the manager’s remuneration, are equal to 1.006%.
Performance commissions, however, are not present.
If you want to learn more, in this report we explain how an overly expensive investment can produce tens of thousands of euros less in returns
Historical returns
Past returns should not be understood as a measure of future returns and, above all, they have no value in comparison with them.
In this case we do not have any data because the phacond is operational only from 2022therefore we do not have any data to carry out reasoning.
Performance scenarios
Since 2023, European legislation has provided that i KID of financial products had a section dedicated to performance scenarios.
The simulations are carried out on the basis of the behavior of the reference market in the last decade and therefore have a purely illustrative value and, as we clearly read, “there is no guaranteed minimum return. You could lose all or part of your investment.”
However, this fund is too recent so there are no scenarios why on the KID there are no historical results to consider.
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Opinions of Affari Miei on the Arca Difesa Attiva 2027 Fund
We have reached the conclusion of the review on the Arca Difesa Attiva 2027 fund. I always keep the last paragraph to express my opinions regarding the product just analyzed.
Is it worth investing in this basket or not?
Let’s start from the fact that flexible funds generally present more critical issues than other funds and, above all, are more difficult to understand.
This fund, as we have seen, does not have a reference benchmark, and therefore does not follow any index to obtain returns.
If you hope to shake up your portfolio of safe securities a little by adding a slightly more profitable investment, perhaps you could think about focusing on another fund, perhaps an equity one and consequently riskier and more profitable.
These are of course all guesses because I can’t tell you anything for sure, as I don’t know your personal or financial situation in detail.
If you have already read other content here on Affari Miei, perhaps you will have understood that, in broad terms, we do not like mutual funds very much due to a whole series of intrinsic characteristics of these products and their distribution: high costs, little transparency and conflicts of interest among banking consultants and their customers.
If you want to delve deeper into this aspect, I recommend you download this free report in which we see first-hand how much inefficient management can affect your assets: the impact is tens of thousands of euros.
In our investment strategy we prefer to use ETFs, passively managed funds which often manage to do better than mutual funds or which at least replicate the benchmark 1:1. These are decidedly more transparent tools that can satisfy your needs and above all offer you greater diversification.
If you are thinking of investing in mutual funds I expect you to have a plan and strategy consistent with your financial and time availability, and above all with your objectives.
Increasing your financial knowledge is the best investment you can make: without strategy, in fact, you won’t go anywhere.
An informed investor, aware of his objectives, is unlikely to purchase ineffective and harmful instruments.
For this reason my advice is to educate yourself and study: I also invite you to read this report in which we explain the enormous impact that all the critical issues highlighted can have over time.
Furthermore, if this is your first time on Affari Miei and you want to know our approach, you can start here.
If you want to broaden the discussion on savings management, and if you want to improve your knowledge in the field of investments, then you can rely on the guided paths of Affari Miei, specific for the various phases of life:
See you soon!
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