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Rođeni investitori - Raiffeisenbank Hrvatska

Investing is natural

Investing is natural

Investing is not a mysterious activity, reserved only for the lucky ones with an unprecedented talent for finance. At RBA, we believe that it is quite natural human behavior. In fact, we are sure that each of us is a born investor..

To be specific, you have already invested approximately 6 seconds of your time in reading this text! In fact, we spend our entire life investing in various things – in our knowledge and skills, friendships, relationships or marriage. We invest in hobbies and health.

Our willingness to invest today, in return for a certain value in the future, is easy to translate from everyday life to the financial world through investing in funds.

HOW DOES AN INVESTMENT FUND WORK?

COLLECTING FUNDS

JOINT INVESTMENT

MONITORING THE VALUE OF YOUR SHARE OF ASSETS

Investment funds collect capital from a large number of investors. The goal is a joint investment of the collected assets into various financial instruments (stocks, bonds, treasury bills, deposits, etc.). All assets in which the fund invests are called the fund’s portfolio.

The investment fund is divided into fund units. Each unit represents a portion of the total assets of the fund, and each investor becomes the holder of a certain number of units.
The value (price) of a unit is based of the fund’s net asset value and is published on a daily basis.

OK, BUT WHY INVEST SPECIFICALLY IN INVESTMENT FUNDS?
  • Professional management - in the investment funds, your assets are managed by professionals. This includes analysis, selection and monitoring of the investment.
  • Availability - due to professional guidance and joint entry into the securities market, you have access to markets that you would not be able to access on your own, with small investments (as little as EUR 15,00 can be invested in the fund)
  • Diversification - reducing investment risk by investing in multiple types of assets.
  • Cashability - you can redeem your units at any time, at the price valid on the unit redemption date.
  • No conversion - investment can be made in EUR or USD, depending on the currency of the fund.
AND THEN THERE ARE RETURNS

A return of the investment fund is the result that the fund achieves for you and represents the percentage of difference in the value of your unit as compared to the initial period. Returns are calculated daily and over longer periods of time (annually since the establishment of the fund). The goal of each fund is for that result to be positive, in the form of additional earnings on the invested funds. In certain periods, the return can also be negative because the value of the fund's assets changes depending on changes in the price of assets, that is, of all financial instruments in which the fund invests.

HOW DO I KNOW WHICH INVESTMENT FUND WILL GIVE ME THE DESIRED RETURNS?

Your returns will depend on:

  • 1YOUR APPROACH TO INVESTING
    We do not all have the same preferences when it comes to our willingness to accept risks or the same time available for investing. When defining your own investment approach, it is important to know the general characteristics of all funds, and to determine your priorities accordingly.
GENERAL CHARACTERISTICS OF FUNDS
VOLATILITY

As a rule, the riskier the fund, the higher its volatility. In other words, volatility shows to what extent a certain security or financial instrument is liable to price changes. Volatility is a characteristic of any fund, and how much this volatility will be expressed depends on the type of instruments in which the fund invests.

Note:
The higher the volatility, the greater the risk - but funds with a higher degree of volatility, potentially may achieve higher returns. For example, an equity fund will often have daily price changes of more than 1%, whereas something like that will almost never happen with a monetary fund. We can say that an equity fund is volatile, whereas a monetary fund is stable.

INVESTMENT TIME HORIZON

Investment time horizon tells how long an investor plans to invest in a fund before deciding to withdraw money. The classic division of the investment horizon is short-term (1 year), medium-term (>1 to 5 years) and long-term (>5 years).

Note:
Financial instruments with a short-term investment horizon usually have the lowest returns, but volatility (and risk) is lower. If a fund invests in higher-risk financial instruments such as shares, the potential yield is higher, but then you need to be patient and aim for a longer investment period because shares can be very volatile.

We recommend:
In order to give fund managers a chance to achieve the investment goal determined by the prospectus of each fund, it is also necessary for the investor to withstand at least the minimum recommended investment horizon, which means adjusting the investment amount to the time period when that money will not be needed.

RISK

Any type of investment carries a certain risk, so do investment funds. The SRRI (synthetic risk and reward indicator) is used to indicate the level of risk of an investment fund, on a scale from 1 or 2 (lowest risk funds – monetary and short-term bond funds) to 7 (highest risk - equity funds). Risk is directly related to the potential return, that is: the higher the potential for returns on investment, the riskier the investment. And vice versa.

Your returns will also depend on:

  • 2 TYPE OF INVESMENT FUND
    Now that you know what to look for when choosing between funds, it will be easier to decide on a particular type of fund. Below is an overview of common types of investment funds.
MAIN TYPES OF INVESTMENT FUNDS

The financial industry develops and adapts products to the needs of clients on a daily basis. Please note that in addition to the above-mentioned types of investment funds, there are other types of funds on the market.

Before investing, every investor should get familiar with the Prospectus and the Rules of the fund. This material or any part of it may not be considered as an offer or solicitation to buy or sell any asset or rights. The above information is provided for informational purposes and cannot be considered as an invitation to invest. Each investor is referred to their own judgment and evaluation of the financial position of the fund and the associated risks. Prospectus, Rules, Key information for investors, financial reports, share value and other information about the fund, in the Croatian language, are available free of charge on the management company's website: www.rbainvest.hr, in RBA branches or at Raiffeisen Invest.

HOW TO INVEST?

Get information, read the Prospectus and Fund Rules before choosing the fund you want to invest in. Once you have chosen a fund that suits your goals and needs, fill out the Application for issuing units in Raiffeisen investment funds

  • in any RBA branch – for private individuals
  • via RBA iDIREKT Internet Banking

To realize your investment and obtain all the necessary professional support, please contact us at RBA branch offices. More information about investing in funds is available on web pages of Raiffeisen Invest.

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