Investing in profitable mutual funds. How to choose the most profitable mutual fund

Unfortunately, not everyone knows at least the basics of planning: the result of an irresponsible attitude towards one’s own finances, as a rule, is all kinds of requests to borrow “before payday”. The vast majority of people treat such requests leniently and allocate the required amount without any problems.

You shouldn’t do this: in some cases you shouldn’t lend money, even if you are asked to do so. We have found that there are two reasons why you should refuse a “debt” request.

Reason one: if you yourself need money

This may seem surprising, strange and even meaningless (and, in general, it is), but some people have such a strong desire to help their neighbors that they always agree to lend someone a certain amount, even if they themselves are in great need in money.

Whether this is a manifestation of altruism or simply the inability to live for one’s own sake, having stopped solving other people’s problems, the result is the same: a person, wanting to help another, happily agrees to borrow another amount, forgetting that he actually needs the money himself.

Whether to lend or not is a personal matter for everyone, but financial difficulties are the most obvious reason to refuse someone in need: if you yourself can barely make ends meet, helping others is simply stupid.

Reason two: if you are not sure who is asking for money

Sometimes it happens like this: you would be happy to give money to someone who is once again desperately asking for “before payday,” and you have the opportunity, but you are not at all sure of the applicant. If you can’t even guess whether the debt will be paid back to you or not, you definitely shouldn’t rush to a decision: “beating” the debtor out of his hard-earned money later is not the best way to spend your free time.

As an alternative, you can offer the person who asks you for money to issue an ordinary receipt that would formalize your agreement: if the debtor subsequently refuses to repay the debt, it will be much easier to collect the funds through the court than if you did not have such a document.

Please note that for such a proposal you may be seriously offended or even angry: many consider such behavior a sign of distrust. If you assume that the applicant will react this way, it would be much better to lie a little, coming up with a fictitious reason that will help you refuse. If the day before you didn’t boast to others about your numerous “houses and ships,” no difficulties should arise.

As you can see, you can and should help other people as needed, but not always: there are situations in which it is better to hold off on helping. In addition, if a person constantly asks for a loan, and you know about it, another handout will not help him: absolutely nothing will change in his life.

The best way to help a person who literally lives in debt is not with money: we have previously talked about how to learn not to get into debt. This approach will not only normalize the financial situation (another loan will cope with this, but only temporarily), but also avoid “monetary disasters” in the future. Having learned to competently plan existing funds, a person will be able to live without depending on random credits, loans and other people's financial assistance.

Tell us what you think: is it always necessary to lend money? Why do you think so?

RIA Rating - May 17. Following the results of last year, the Russian collective investment market continued to develop actively, which was particularly reflected in the high growth rates of net assets of funds and good dynamics in the number of shareholders. On the other hand, the number of funds has decreased. This is evidenced by the results of the rating of mutual investment funds in 2017, prepared by RIA Rating experts based on data from the Central Bank of Russia.

The value of the net assets of public (open and interval) mutual funds, according to RIA Rating estimates, in 2017 increased by 62.8% to 222 billion rubles, while the number of fund clients over the year increased by 3.4% or by 50 thousand people (total the number of shareholders exceeded 1.5 million). It is worth noting that the share of mutual funds in the Russian financial market, and in particular in the collective investment market, looks relatively small, but is growing very quickly. Thus, the total value of net assets of public funds as of January 1, 2018 amounted to 0.9% of household deposits in banks and 9.3% of pension savings in non-state pension funds. For comparison, as of January 1, 2017, the value of net assets was 0.6% of household deposits in banks and 6.4% of NPF savings. According to RIA Rating experts, the trend of rapid development of mutual funds relative to other financial markets will continue in 2018, but will slow down significantly due to a decrease in profitability.

New regulation brings radical changes

The structure of funds by type changed quite a lot at the end of the year, and now one type of fund consolidates more than 90% of all assets. In particular, among all types of funds, funds that specialize in working with market financial instruments dominate, of which there are a total of 310 units in the rating (303 open and 7 interval). In general, the rating represents 327 mutual investment funds in Russia, of which 308 are open-ended funds and 19 are interval funds. Thus, 95% of the funds are funds of market financial instruments, and the total value of their net assets amounted to 220 billion rubles or 99.2% of the total assets of all mutual funds. For comparison, at the end of 2016, the largest share was held by funds specializing in working with shares, of which there were about 30%. It is worth noting that the sharp increase in the number of funds of market financial instruments is associated with new rules for regulating mutual funds. If previously there were many types of funds, but the names and types of mutual funds were most often uninformative, not characterizing the strategy of a particular fund, now almost all funds have one type, but essentially this has not changed anything.

The largest increase in absolute terms at the end of 2017 was characterized by Sberbank - Perspective Bond Fund, the volume of assets of which at the end of the year increased by 21.3 billion rubles or 8.6 times. Due to the significant growth of assets, the fund was able to immediately take 1st place, although a year ago it occupied 12th position in the ranking. The second and third funds in terms of absolute growth in assets were: Alfa Capital Bonds Plus - +13.9 billion rubles and Gazprombank - Bonds Plus, whose assets increased by 9.1 billion rubles. Over the past year, three more funds were able to demonstrate an increase in assets of more than five billion rubles each. In particular, the increase in Raiffeisen - Bonds amounted to 7.3 billion rubles, Sberbank - Ilya Muromets Bond Fund was characterized by an increase in assets at the level of 7.1 billion rubles, and the increase in the Ruble Bonds fund was the same 7. 1 billion rubles.It is worth noting that eight more funds were characterized by growth in the range from 1 to 5 billion rubles.

The reduction in the number of funds and the relatively rapid growth of total assets of mutual funds led to a significant increase in the average size of funds. In particular, the median size of mutual funds at the end of 2017 increased by 20% to 65 million rubles compared to NAV 54 million rubles as of January 1, 2017. In addition, the number of funds with assets of more than 500 million rubles increased to 67 funds (56 as of January 1, 2017). At the same time, the share of the TOP-10 funds in the total value of net assets increased over the past year by 15 percentage points to 56.1% as of January 1, 2018, and the share of the TOP-100 mutual funds increased by 3 percentage points to 94.8%. Thus, there are very small funds outside the TOP 100 mutual funds.

The leader in terms of net asset value in the rating of mutual funds at the end of 2017 was Sberbank - Perspective Bond Fund, whose asset value as of January 1, 2018 amounted to 24.2 billion rubles. In second place is the former leader of Raiffeisen - Bonds with a NAV as of January 1, 2018 of 20.5 billion rubles. Third place was taken by Gazprombank - Bonds Plus with assets of 18.6 billion rubles. In fourth and fifth place in the rating of mutual funds are Alfa Capital Bonds Plus and Sberbank - Ilya Muromets Bond Fund, whose assets amounted to 17.3 and 12.7 billion rubles, respectively. For comparison, the volume of assets of the rating leader Mutual Funds are comparable to the size of the 151st bank in terms of assets as of January 1, 2018. While the total assets of all Mutual Funds together correspond to the assets of the 42nd largest bank in Russia.

A significant part of the funds brought profit to their investors, but the profitability decreased

At the end of 2017, the main part of the funds was characterized by an increase in the value of the share and thus the clients who invested in them received a profit. An increase in fund value was observed in 224 or almost 69% of the funds presented in the rating. It is worth noting that the funds that experienced an increase in the value of the unit serve 94.6% of the total number of mutual fund clients, and the share of their assets in the NAV is 89.8%.

At the same time, the profitability of the funds is gradually decreasing. Thus, the median yield of mutual funds at the end of 2017, according to the rating results, was only 5.2% versus 12.8% in 2016. In turn, only 14 funds demonstrated returns above 20% at the end of 2017, compared to 123 funds in 2016. Thus, in general, the return on funds has decreased quite significantly, but the return level of 5.2% turned out to be more than 2 times higher than inflation, which was 2.5% in 2017. A radical reduction in profitability reduces the attractiveness of this type of investment, since the profitability in large banks is several percentage points higher. According to RIA Rating experts, only 36.1% of mutual funds managed to demonstrate a return higher than on deposits in large banks, which at the beginning of 2017 was at the level of 8.4%. In general, two main reasons for the fall in profitability can be identified. Firstly, investments in Russian shares turned out to be risky; many issuers, including blue chips, showed a significant decline. Secondly, there is a decrease in yield on debt instruments, which affects the income of many mutual funds.

The highest profitability of all mutual funds included in the rating at the end of 2017 was demonstrated by Sberbank - Global Internet, with an increase in the estimated value of the share for 12 months of 2017 by 40.9%. In second and third places in terms of profitability in the ranking are Alfa Capital Technologies and Raiffeisen - Information Technologies, whose profitability was 31.9% and 30.4%, respectively. The three most profitable funds showed good results by investing mainly in technology companies. The fourth and fifth in terms of profitability were "Savings Management - Asia" and "VTB - BRIC", whose profitability at the end of the last year was 30.2% and 27.5%.

It is worth noting that the first four mutual funds with the highest profitability in the current rating in 2016 showed extremely weak results. The four leaders in profitability in 2017, based on the results of 2016, experienced losses ranging from 11.3% to 20%. Thus, last year's record returns contrast with significant losses a year earlier. It is worth noting that the collective investment market is unstable and such dynamics from year to year are not unusual.

According to RIA Rating experts, the collective investment market is small and quite volatile. Therefore, in the near future the dynamics may either repeat the records of 2017 or become negative. RIA Rating experts expect that, most likely, in the medium term the collective investment market will continue to grow in monetary terms. However, don't expect any records. At the same time, the growth rate of net asset value may decline quite significantly already in 2018, which is associated with the observed decrease in profitability of most mutual funds.

RIA Rating is a universal rating agency of the media group MIA "Russia Today", specializing in assessing the socio-economic situation of regions of the Russian Federation, the economic condition of companies, banks, economic sectors, countries. The main activities of the agency are: creating ratings of regions of the Russian Federation, banks, enterprises, municipalities, insurance companies, securities, and other economic entities; comprehensive economic research in the financial, corporate and government sectors.

MIA "Russia Today" - an international media group whose mission is prompt, balanced and objective coverage of world events, informing the audience about different views on key events. RIA Rating, as part of MIA Rossiya Segodnya, is part of the agency’s line of information resources, which also includes: RIA News , R-Sport , RIA Real Estate , Prime , InoSMI. MIA "Russia Today" is the leader in citation among Russian media and is increasing the citation of its brands abroad. The agency also occupies a leading position in terms of citations in Russian social networks and the blogosphere.

The stock market continues to be one of the most accessible and profitable tools for accumulating capital. However, not all novice investors have enough experience and enough money to diversify to buy shares. Therefore, mutual funds are the most popular alternative to the stock market, as they allow you to passively invest in various Russian securities and other assets (gold, real estate or foreign shares) and receive a good level of profitability.

2017 was quite a successful year for mutual funds.

Of the 247 open funds, 175 projects closed the year with a profit, and 76 allowed investors to receive an income of more than 10% per annum, and 25 - more than 15%.

Naturally, the numbers are relevant if you invest from the beginning of the year. A significant part of the funds are subject to volatility, and by purchasing shares at a minimum value, one could earn much more.

Based on the results of reporting submitted for the 4th quarter of 2017, the most profitable mutual funds were:

At the end of 2017, the most profitable were mutual funds investing in shares of developing countries and shares of the technology sector.

Funds specializing in mixed investments (mainly stocks and bonds in portfolios) and pure “bonds” performed well. Thus, the Mobile fund of the Sistema Capital company gave a return of 15.06% per annum, and the mutual fund Financier BFA - 16.41%.

For such conservative and risk-free instruments as bonds, this is a very good indicator (in this case, part of the portfolio consists of “junk bonds” with a large coupon income, but low stability, i.e. the funds earned money by balancing between assets and proper diversification) .

Among inexperienced investors, it is believed that it is worth investing exclusively in profitable mutual funds. That's why they look for such ratings, trying to choose the fund with the maximum profit. But is it worth focusing on this indicator? Let's try to figure it out.

Return means that the share price has increased from a certain value at the beginning of the year to another at the end. An investor who bought a share at a lower price will sell it at the end of the year for a profit. However, profitability in a certain year does not mean that in the next year the investor will receive the same or close to it profit. There is a possibility that by the end of next year the share will return to its previous price or drop lower.

Income mutual funds grow on a specific investment idea. In 2017, these were shares of developing countries (mainly members of the BRICS), as well as shares of the technology sector (growth was achieved largely due to the popularity of Bitcoin). It is not a fact that the trend and profit level will continue in 2018.

For example, one of the profitable funds in 2017, China (Otkritie Management Company), showed negative returns in 2016 - the value of the share fell from 1,871 rubles to 1,730 rubles, i.e. by 7.5%, and in 2017 won back the fall and entered the TOP 5 in terms of profitability.

When choosing a mutual fund, you should rely on the profitability of previous years with caution. Analyze why the high profitability was achieved - competent management or was the fund just lucky?

If you take profitability as a key criterion, consider it in dynamics and over a longer period, at least for 3 years. This period is considered the optimal time for holding shares in ownership - the fund has time to work out both declines and rises, and gives an average return. It is important that when selling such shares you will not have to pay income tax.

If we look at the most profitable mutual funds for 3 years, the rating will look completely different:

At the beginning of 2018, the Sberbank Asset Management mutual fund leads in terms of reported returns

Statistics show that only equity funds related to energy or representing a balanced portfolio of shares of the largest companies (blue chips) are in a three-year upward trend.

The strategies of these funds are conservative or moderate, the volatility is not too strong - the average drawdown does not exceed 20%. Therefore, you can count on the fact that in the next three years these mutual funds will demonstrate similar returns or are guaranteed not to lose value.

If you want to make a profit in the long term, when analyzing profitability, pay attention to the following facts:

• Systematicity of profit– if investments work positively from year to year, the chances of a successful completion of the next year are high;
• Drawdown size– conservative strategies provide for drawdowns of no more than 5-7%, moderate ones - up to 15-20%, if the fund allows large losses, there are big problems with its management;
• Correlation with benchmark– they should go approximately on par, if the fund’s profitability graph differs too much from the benchmark – this is an alarming signal indicating problems in management – ​​ideally, the mutual fund’s graph should break away from the index, but repeat it in general terms.

For reference: benchmark in simple words - these are assets on which profitability is assessed. Their role is played by selected securities or indices included in the portfolio of a mutual fund. For example, the Sberbank Balanced Mutual Fund has been using as a benchmark since January 1, 2018 - 50% MCXCBITR Index / 50% Moscow Exchange Index.

When analyzing the potential return of a fund, pay attention to the following aspects:

• Composition of assets. The most stable and profitable funds are of a mixed type (bonds + shares); investments in mutual funds of shares are traditionally the most profitable, but their shares are more volatile.
• Asset Allocation. You should pay attention to how diversified the investments are and what are the prospects for the largest issuers. If there is an overweight, a stock that has fallen in price can drag down the entire portfolio. This is true for bonds - it’s one thing when a significant part of the assets consists of government bonds, another thing is “junk” ones from the foreign market.
• Dynamics of assets. Note how often managers shake up the portfolio by getting rid of unfavorable issuers, whether the structure is left unchanged, whether new items are included, or the composition of assets is not revised (red flags).
• Net asset value. If the NAV grows, there are more people willing to invest in mutual funds. NAV has little effect on profitability, but the more funds a fund has at its disposal, the larger investments it can make - this increases the chances of a positive outcome. Plus, if a large investor withdraws his money, the manager will not have to urgently get rid of assets in order to pay him the money - there will be reserves.
• Strategy. The greatest profit comes from an aggressive strategy (investing in stocks or other funds), but the value of the share here has the greatest volatility. Investments in bond mutual funds bring stable but small profits. If it is important to preserve rather than increase capital, choose stable projects rather than the most profitable ones.
• Team. The professionalism of managers is extremely important. If the team has several successfully operating mutual funds under its control, then the one you choose is more likely to get a good result. If a successful manager heads a newly created project, this is an excellent chance to invest and make money on its “promotion”.

With a short-term investment, you can count on excess income and invest in funds with a speculative strategy. But if you are looking forward to a long term, prefer projects with predictable and stable returns.

Useful material

Stocks or bonds

The main influx of funds over the summer came from bond funds - they were replenished by a total of 20.2 billion rubles. Investing in bonds is suitable for investors who are not ready to take on significant risks, since the debt market is less susceptible to the influence of the current situation than the stock market, notes Bogdan Zvarich.

What type of securities to invest in depends on what investment period the shareholder expects. According to experts, for short-term investments (up to three years), bond mutual funds are more suitable; for a longer term, you can choose shares. According to Investfunds, for three years (from September 2014 to September 2017), the return on stock funds was more than 68%, and the return on bond funds was about 60%. However, for a shorter period, the opposite picture may be observed: for example, from January to September 2017, the return on bond funds was 6.7%, on stock funds - 5.7%.

You can choose mixed mutual funds, that is, those that invest in different instruments. “The longer the investment horizon, the more shares you can afford,” says Nikita Emelyanov. At the same time, he believes that an investor can afford to invest approximately 10% of his portfolio in shares for the short term.

Bond funds are not always clearly profitable, and when choosing them, experts advise paying attention to the quality of the securities in which the mutual fund management company (MC) invests. “I would advise choosing funds whose portfolio is made up of first-class bonds of issuers, that is, securities of large companies and companies with state participation,” says Dmitry Alexandrov. The yield on bonds of small companies is usually higher, but the risks, especially liquidity risk, are very large, the expert believes.

According to him, it is worth taking a closer look at Eurobonds of Russian issuers. There are also such mutual funds, but in this case it is important that the fund’s portfolio includes only senior issues, and not subordinated ones (that is, those for which payments are made last in the event of bankruptcy of the issuer). “I would also advise investing in Russian rather than foreign securities, since for managers this is a more understandable and controllable product. In addition, they have higher profitability than foreign ones,” notes Aleksandrov.

Executive Director of FinEx Plus Management Company Vladimir Kreindel believes that you should not choose any particular asset class (stocks or bonds) and invest only in it, trying to guess the direction of the market. “The more correct way is to create and maintain a balanced portfolio, which includes stocks, Eurobonds, and gold,” says the expert.

How to choose a fund

When choosing a mutual fund in which to invest, a shareholder should look first of all at the stability of the fund’s performance and the predictability of its profitability, says Nikita Emelyanov. At the same time, the analyst does not recommend focusing only on historical profitability. “This is, of course, an important parameter, but it is far from the key one. The manager might get lucky and invest in an asset that has grown along with the market. It happens that one successful transaction can make the fund a leader in terms of profitability for the whole year, but this does not at all guarantee that the investment strategy of the management company will continue to be successful,” says Emelyanov.

Dmitry Alexandrov adds that the history of the management company and its reliability (according to rating agencies) are also of great importance.

In addition, the size of the mutual fund is important. A fund's net asset value (NAV) is a publicly available measure that shows how much money a fund has minus liabilities as of the calculation date. According to analysts, the larger the fund, the less dependent shareholders are on the actions of other large shareholders of the same fund.

And, of course, the shareholder should familiarize himself with the investment strategy of the management company. Lawyers note that this issue is controlled by the Central Bank, and deviations from the instruments permitted in the strategies are prohibited. “Execution is monitored both by the Central Bank itself and by a special depository (asset storage facility), which approves transactions, carries out operations at the request of managers and blocks if transactions are unusual or harmful for shareholders,” explains Anton Tolmachev, managing partner of the legal company YurPartner.

How much will the shareholder receive?

It is not difficult to buy or sell a share of an open-end fund, explains Vadim Yarosh, head of the client relations development department at Capital Management Company. The client needs to contact the management company or an agent with a passport and bank details (usually banks that provide services for processing purchase and sale transactions with mutual funds act as agents). You can submit an application for purchase or sale (redemption) on any working day. “The terms of acquisition and redemption are specified in the rules of the fund. You can withdraw part of your assets, and in the same way, an investor can freely buy additional shares at his own discretion,” says the expert.

Each fund has its own entry threshold. “On average, this is from 10 thousand rubles, but many companies set a lower threshold,” says Vadim Yarosh. In some cases, it is also possible to exchange units without a commission between funds of the same management company.

When calculating the value of a share, the investor must take into account costs - discounts and premiums that must be paid during the transaction. When entering the fund, the investor pays a premium, the amount of which depends on the purchase amount. This percentage is charged as a fee to the person accepting the entry application and, according to the Law “On Investment Funds”, is no more than 1.5% (for some funds the premium is 0%). For example, if a share costs 10 thousand rubles, and the premium is 1%, then the total cost of the share is 10.1 thousand rubles.

When a depositor decides to withdraw from the fund, he must pay a discount (remuneration to the person accepting the redemption request), which is no more than 3%. For example, if the cost of purchased shares has increased to 15 thousand rubles, and the discount is 1%, then 150 rubles will be withheld from this amount upon sale.

You must also pay tax on your income. “If a person sells shares after three years of holding them, then there is no taxation at all, and if earlier than three years, then 13% of the income is charged by the tax agent,” explained Anton Tolmachev.

Disadvantages of mutual funds

Despite the increase in the volume of funds attracted to mutual funds, many analysts are skeptical about this instrument. “Attitudes towards mutual funds changed after the 2008 financial crisis. Then the funds showed very poor dynamics, and most shareholders did not manage to withdraw funds on time, losing significantly,” recalls Bogdan Zvarich.

Mutual funds can hardly be called the optimal option for a Russian investor, says Vladimir Kreindel. “High costs and losses caused by the peculiarities of mutual funds (for example, the need to maintain a high share of the fund’s portfolio in rubles) can seriously worsen investment results,” he said.

In addition, unlike bank deposits, investments in mutual funds are not insured by the state, even if the shares were purchased through a bank. And a bond portfolio can significantly lose value. “Let’s say the fall in bond prices at the end of 2014 wiped out all the gains from the previous two or three years,” Kreindel says.

However, he adds, these disadvantages do not mean that collective investment instruments should be ignored, since the increased profitability compensates for the possibility of drawdowns in the form of a temporary decrease in value.