Small profits from bank deposits or treasury bonds are not enough for you? Investment funds seem like an alternative to you, but you don’t know how to start and how they work? Now you don’t need to know anymore! There are already solutions on the market that will support you in this process. Thanks to the robo-advisor, investments are now a job for a robot.
Check how to create a solid and effective fund portfolio
Rising inflation and low interest rates encourage all holders of financial surpluses to move them from bank deposits and very safe products towards assets that give a chance for rates of return that allow them to “make up” the loss of value of money.
Despite the pandemic, Poles have not stopped saving money. As shown by a survey commissioned by ING, 22% of respondents even increased the amounts saved during the pandemic year. The increase in the amount of money saved is the result of greater prudence in spending money, but also fewer opportunities to spend it. The challenge remains the proper allocation of these funds.
For those who do not have much investment experience, mutual funds can be a way to invest effectively. However, you need to properly arrange the portfolio of such funds and then track its results. You also need to properly determine the moment when you should make changes to your fund portfolio. All this requires a lot of knowledge and a lot of time to keep track of the situation on the markets – because although we do not directly buy and sell shares or other financial instruments, we invest in them through fund participation units.
The group of investors interested in investing in investment funds is growing. They are also increasingly paying attention to the fact that their activities are as time-consuming as possible, and at the same time effective.
Younger age segments – up to 45 years of age, and in particular people aged 18-26, show a greater willingness to invest and consider making investments. The greater openness of people in this age group to investing results from their greater openness to investments, the belief that small amounts can be invested, but above all, the awareness of the functioning of technological solutions on the market that can be helpful in investing.
Hence the great interest in solutions based on investment automation. These solutions – so popular in the United States – are just entering our country.
Technology and investing
Technology in the investment process is positively assessed by over 40% of respondents – they believe that it facilitates making decisions about investments and can be an alternative to expert advice. Modern investment tools such as Investo are therefore a response to the knowledge deficit and the need to support clients in investments.
The basis for the robo-advisor’s operation is the analysis of the investor’s knowledge, his risk appetite and recommendation of appropriate solutions. Investo is based on four funds managed by NN Investment Partners TFI: NN Short-Term Bonds, NN Bond Index, NN Global Diversification, NN Polish Responsible Investing. In the event that the investor is interested in higher potential returns, and at the same time is willing to accept higher risk, most of the funds are transferred to more “aggressive” funds. Most importantly, however, the investment robot makes sure that the distribution of funds in the portfolio into funds with different levels of risk is consistent with the level of risk accepted by the investor – this is the so-called rebalancing. Every quarter, the robo-advisor changes the distribution of funds between the funds so that the portfolio maintains the same – originally determined level of risk.