Independent Financial Advisor and Co-Founder of Affari Miei
November 3, 2023
How to disinvest from a losing Sicav fund? It suits? If you have invested your savings in a fund Sicav because you thought it was an interesting investment for you and now you find yourself with the funds at a loss and you are panicking, then you have come to the right place.
You are probably wondering what to do in a similar situation, how to handle such a loss and above all you are trying to find a solution that may be the best for you.
Before understanding which solution to follow to resolve the situation, we will also try to understand what Sicav funds are and how they differ from normal ones mutual investment fundsto get a general overview.
We can start!
This article talks about:
What are Sicav Funds
Let’s start immediately with the definition.
The SICAV I am variable capital investment companyand are joint-stock companies with variable capital whose exclusive object is the collective investment of the assets raised through the offering of their shares to the public.
They were introduced into Italian law by Legislative Decree 25 January 1992, n.84and are currently regulated by consolidated text of the provisions on financial intermediation of 1998.
These companies are able to offer savers a leading role.
Se invest in Sicav funds you will not benefit from simple shares, but you will acquire real ones actionsand therefore you will become a shareholder, also obtaining a more active participation.
The policy of these funds is in fact based on common investments, and they draw from the financial resources of all the investors and shareholders who participate in them.
The Sicavs are also supervised by Bank of Italy and from Consob and must comply with certain capital requirements (share capital not less than 1 million euros), good repute and professionalism on the part of the directors.
They must also provide in the statute theexclusivity in the corporate object of the collective investment of the shares raised from the public. Here you can find out more about what these funds are and whether they are worth investing in.
How Sicav funds work
The wealth management of Sicavs can take place in two different ways, therefore either through the directors themselves or through asset management companies.
The funds do not provide for the distinction between the manager’s share capital and the assets that he manages.
One of the most interesting advantages of a Sicav fund refers to the fact that it cannot risk failing, given that it only involves investing the assets in financial instruments without generating debt.
Differences between Sicav funds and mutual investment funds
Let’s now see what they are differences between Sicav funds and mutual investment funds.
First of all we can say that Sicavs carry out a more active role: in fact you acquire the shares of the companies and you can participate in the meetings and you have the right to vote.
In concrete terms, by investing in a Sicav fund, you become a member and can have a much greater impact than you can with mutual investment funds.
The main difference is precisely this, namely that you have more decision-making power if you are an investor in Sicav funds compared to investors in a mutual fund.
Another difference is that in the Sicav fund the asset management it is carried out within the company, whereas in mutual funds it is always delegated to an external entity, which can for example be an SGR (asset management company).
To learn more about the world of mutual funds you can read this guide.
I Sicav funds they also present some disadvantageswhich are undoubtedly the management costs high, as happens with mutual investment funds: there are in fact various commissions to pay, such as subscription, deposit and performance commissions, as well as the usual management commission which must be paid to the management of the company that takes care of the management of the heritage.
Another significant disadvantage is the lack of distinction between the company’s assets and the invested capital: if the company were to fail, you would automatically lose all the invested capital. However, this is a hypothesis that is very difficult to verify.
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Why divest?
Investing your life savings is not a simple thing: you need to find the right tools, you need a good diversification strategy and this is not easy.
Even making the opposite decision, that of disinvesting, is not at all simple.
But why might you want to disinvest?
You may need a sum of money for some unexpected event or eventuality, and therefore to cover these expenses you may want to opt for a disinvestment.
This choice to disinvest However, it must be carefully considered, because it could often prove counterproductive for you and your investment.
Since we are talking about Sicav funds, I have explored the topic in depth here.
Do you want immediate support?
I want to tell you right away, if the idea of seeing your funds at a loss makes you sleepless, that the only way to find peace is to rely on professionals, and not act on impulse.
You will certainly have already contacted your bank, but they will have reassured you without really dispelling your doubts, trying to make you give up. So I would say to go elsewhere to clarify: we, as an independent financial consultancy company, can support you through an analysis of your current investments.
If you want to get in touch with us for concrete help, here you will find the details to book a first free session with our staff in order to understand how we can best support you.
Sicav funds at a loss: is it worth disinvesting?
I just mentioned to you that the path to disinvestment must be considered and followed only after having thought thoroughly about every possibility.
Furthermore, it is a path to take only if there are no other ways out.
I must remind you and warn you: for exit an investment like this you will very often find yourself having to pay exit penalties, which could also be very substantial.
So the first thing to do is definitely read the Informative prospect and better understand what the penalties are for early exit.
If you have realized that the returns are no longer what they were before, or that the investment is at a loss, don’t panic and think about what to do.
Sicav funds, as we have widely seen, invest in shares, so it could be counterproductive disinvest when the markets are falling, as you could find yourself losing a lot.
In fact i equity funds are very influenced by volatilityand perhaps you could consider maintaining the investment and waiting for a more favorable time to disinvest, i.e. a time when you could minimize your losses.
In conclusion I can therefore tell you that disinvestment is a difficult choice.
Always think about it well, and remember that often disinvest it could lead to greater losses, so sometimes it might be better for you to keep the investment and wait until the times on the markets are ripe, that is, that they are better and more convenient for your investment and that allow you to minimize your losses.
If, however, you need the money immediately and that famous sum of money, then consider disinvesting immediately, but carefully read all the penalties and clauses in the information prospectus.
You were probably calm until now because your trusted promoter has always seemed like a reliable person: elegant and well dressed, he reassured you and, although in recent years your investments may not have been performing as they should have, you didn’t even notice it because you all you needed to do was see the “+” sign and you were at peace.
Isn’t it true that that’s exactly how it happened? By downloading this report for free we will explain how to obtain up to €82,770.54 in additional returns simply by avoiding bank funds like the plague.
How long does it take to disinvest funds?
Generally speaking, it takes 3 working days to disinvest the money, up to a maximum of 7 working days.
If the stock markets collapse and the world economy never recovers, in fact, we return to the Middle Ages and the money you invested takes on a relative value.
If you think the end of the world is coming, what you should worry about is the future of your job, your profession, your family. But in reality this is not the case, often your fear is linked to money: for this reason I strongly advise you to download the report in which we explain how to obtain up to €82,770.54 in additional returns simply by avoiding bank funds like the plague.
I’m offering you a concrete solution, not a simple and banal advice!
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My Business Opinions
Now that we have seen in detail how to behave when we find ourselves faced with an unpleasant situation such as that of funds at a loss, I can finally provide you with my opinions about.
Often the error does not lie in the tool itself, but rather in the general knowledge of the market or in the strategy that is chosen to pursue to obtain one or the other objective.
When you signed up for these funds, perhaps you didn’t fully understand them, or you expected other returns which however did not live up to your expectations.
If you have decided to wait, remember that you have made the right choice: the goal you must try to pursue is always that of minimize losses.
If you had to divest immediately I don’t blame you: often, however, the quickest solutions are also those that risk doing you more harm than good.
My final advice is to study e train youbecause only in this way can you truly have full control of your finances and be able to act with awareness.
If you follow the path of financial education, with a well-structured path, you will certainly be able to take control of your money, or you could get help from independent professionals who are not linked to the network from which you have subscribed to the products.
This way you will be able to obtain information and opinions free of conflict of interest.
In fact, I believe that investing alone is the best solution, since in this way you can really be aware of your investment and any errors.
If you are currently confused by too much information and have not yet completely calmed down, then I invite you to sign up to our report dedicated to mutual funds in which we explain to you in just a few minutes how they work and, above all, the important things that they never told you at the bank.
Do you really think mutual funds can fail?
Conclusions
I haven’t made a reflection yet: la active management it also has very high costs, which affect the returns on your investments.
So think about it carefully, because often the game might not be worth the candle.
In your opinion is it worth it?
Precisely to help you answer this question, I have created a report to allow you to delve deeper into the topic. Download it for free now!
I also leave you with some useful resources to start an informed investment journey:
See you soon!
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