To know the answer to this question, we first need to know what the Investment Companies in Mexico are, what they are for and the types of Investment Companies in Mexico.
Investment Companies in Mexico, better known as funds, are financial instruments for bringing together the investments of several people to have access to portfolios of shares that would not be possible individually and are divided into: (a) debt securities, (b) equity funds, (c) capital market, and (d) limited purpose investment.
(a) Investment Companies in Debt Securities may only invest in debt securities whose net profit and loss are assigned daily among the shareholders. They represent low risk since by their nature the outputs acquired are taken until maturity.
(b) Equity Investment Companies were the first to appear in the country and their assets are invested in equity securities and debt securities. The investor obtains a capital gain that consists of the difference between the sale price and the purchase price.
(c) Capital Investment Companies operate with assets such as shares, obligations and bonds in charge of Companies Promoted by the investment fund itself. They temporarily invest their resources in companies that present financial viability and significant capacity for productive development that result in a return on invested capital.
(d) Limited Purpose Investment Companies invest exclusively in financial instruments defined in their bylaws and in their information prospectus for the investing public.
The profitability of the Investment Companies is derived directly from the performance provided by the securities or financial instruments in which they have invested the resources of their shareholders. The return is determined by the difference between the purchase and sale prices of the Company’s shares in a given period.
It is important to be aware of some of the possible disadvantages of investing in an Investment Company:
– Possibly the Investment Company does not carry out operations every day, so you have to adapt to the operating policies and schedules.
– Possibly the Investment Company has daily buyback limits, so that you will not be able to withdraw all of your investment at one time.
– You have to choose the Investment Company with the portfolio profile that best suits your preferences according to orientation, risk level and return.
Investment Companies are the most used vehicle to access a more profitable diversification of investments. But the most important part is to get advice and compare options, an advisor specialized in the subject will be able to carry out an analysis of your needs and characteristics in addition to suggesting the funds, combinations and proportions that will enhance your savings.
Gloria Ponce de León & Hernández