Another problem is that whenever there are reports in the media about great results of a certain investment fund and a private investor is interested in it, more detailed information about it is not available. The reason is obvious: most securities advisors of banks or savings banks "know" only their own products, at the most the funds of their cooperation partners. This is not the case with investment companies. They provide their clients with detailed information material. Investors should therefore not be satisfied with the first offer of their house bank, but rather strive for a comparison between the different companies.
Here, too, the companies are almost never prepared to provide information on all funds or on funds specifically requested by the client. They also do not send out any information. It is also advantageous to know which investment company is behind a particular fund. As a rule, this is only possible for those in the know. However, the following table solves the mystery.
Rich pickings: mutual funds clearly beat traditional investments
Saving is not an end in itself. Those who practice consumer restraint today want to be able to afford more in the future. How high the reward for abstinence will be in the end depends to a large extent on the return on an investment. Experts calculate that in the long term, the compound interest effect itself does not cause any difference in returns to grow into a fortune. If you invest 100 euros a month for ten years at 5.39 per cent, this will result in a fortune of 15,817 euros.
If, on the other hand, you regularly buy shares in international equity funds for the same amount, you can expect 20,146 euros at the end of the savings period. This corresponds to a long-term annual return of 10 percent, as achieved on average over the last 30 years.
Concept
What is the appeal of the fund idea? Whereas the stock market used to be left to well-informed investors in Exness accounts, small savers and stock market newcomers can now also profit from rising prices. Funds collect the money of a large number of savers and entrust a professional management with its administration. This creates a much broader securities portfolio than individual investors can afford. By spreading the assets - usually over 50 or more securities - the risk of price losses is significantly reduced. Possible losses of individual securities are compensated by the profits of others.
Flexibility
While conventional forms of savings (time deposits, savings bonds, public bonds, etc.) are often tied to a minimum investment amount or a longer time period, many fund companies offer entry via savings plans for monthly instalments as low as 50 euros. For one-time investments, the minimum amounts offered by most providers are 2,500 euros, sometimes even less. And: fund savers do not have to commit themselves over a longer period of time. The units purchased can be redeemed on each trading day.
