Guaranteed Investment Funds: Complete Guide 2026

The guaranteed investment funds are financial products designed to protect the initial capital of the investor, while offering the possibility of obtaining additional returns. These funds combine the security of the guarantee with the growth potential of the markets. They are an attractive option for conservative investors who seek to minimize risks without giving up on obtaining some benefit.

What are Guaranteed Investment Funds?

Guaranteed investment funds are financial instruments that ensure the return of the initial invested capital, provided that the investment is maintained for a certain period of time. They work by investing in low-risk assets, such as public debt, and in derivatives that allow participation in the evolution of other assets, such as stock indices. The key is that a part of the investment is allocated to guarantee the capital, while another part is used to seek returns.

The main difference between guaranteed funds and other types of investment, such as equity funds or bank deposits, lies in the balance between risk and return. While equity funds offer a higher potential for gains but also a higher risk of loss, and bank deposits guarantee the capital but offer limited returns, guaranteed funds are in an intermediate position. They offer a capital guarantee, although the additional return can be variable and depend on the performance of the underlying assets. The CNMV regulates these products to protect investors.

Types of Guaranteed Investment Funds and Their Return

There are mainly two types of guaranteed investment funds, differentiated by the assets in which they invest to seek returns:

• Guaranteed fixed-income funds: These funds mainly invest in bonds and other debt instruments. Their objective is to offer a stable and predictable return, although generally lower than that of equity funds. An example would be a fund that invests in German government bonds with a 5-year maturity, guaranteeing the return of the capital at the end of that period.
• Guaranteed equity funds: These funds invest in stocks or stock indices. They offer a higher potential for growth, but also a higher risk. The capital guarantee is achieved through hedging strategies that limit losses in case of market declines. For example, a fund that invests in the IBEX 35, guaranteeing 90% of the initial capital after 7 years, with a return linked to the index's evolution.

The return of the guaranteed funds varies depending on the type of fund, market conditions, and the investment strategy of the manager. In general, the expected return is moderate, as the capital guarantee implies giving up a higher potential for gains. It is crucial to compare the historical return of different funds and analyze the fees applied to assess their attractiveness.

Advantages and Disadvantages of Guaranteed Funds

Guaranteed investment funds offer several advantages, but they also present some limitations that are important to consider before investing:

Advantages:

• Capital protection: The main advantage is the security of recovering the invested capital at the end of the guarantee period, regardless of the evolution of the markets. This provides peace of mind, especially in times of economic uncertainty.
• Potential for return: Although the return is usually moderate, guaranteed funds offer the possibility of obtaining additional gains if the underlying assets perform well.
• Diversification: They allow access to different markets and assets in a diversified way, which reduces the risk compared to investing in a single asset.

Disadvantages:

• Lower return: Compared to other riskier investments, such as equity funds, guaranteed funds usually offer a lower return.
• Fees: They tend to have higher fees than other funds, due to the complexity of management and the capital guarantee.
• Limited liquidity: In general, it is not recommended to withdraw the money before the end of the guarantee period, as the capital guarantee may be lost.
• Opportunity cost: The money invested in a guaranteed fund could have generated a higher return in other riskier investments, especially in periods of strong economic growth.

How to Choose the Best Guaranteed Investment Fund?

Choosing the best guaranteed capital fund requires careful analysis and considering several factors:

1. Risk profile and investment objectives: It is fundamental to determine what your risk tolerance is and what your financial goals are. If you are looking for security and are willing to give up a higher return, a guaranteed fund may be a good option.
2. Fees and expenses: Carefully analyze the management, deposit, and other fees associated with the fund. High fees can significantly reduce the final return.
3. Reputation and experience of the manager: Investigate the track record and solidity of the fund's manager. A manager with experience and a good reputation offers greater confidence. The BdE supervises financial institutions.
4. Fund characteristics: Pay attention to the guarantee period, the assets in which the fund invests, the target return, and the conditions for early withdrawal.
5. Comparison with other options: Compare the guaranteed fund with other investment alternatives, such as bank deposits, fixed-income funds, or mixed funds, to evaluate if it fits your needs.

In our experience, selecting an appropriate guaranteed fund involves an exhaustive analysis and considering the individual circumstances of each investor. We offer personalized advice to help you make the best decision.

Frequently Asked Questions

What happens if the company that manages the guaranteed investment fund goes bankrupt?

If the company that manages the fund goes bankrupt, the fund's assets are protected and separated from the company's assets. This means that investors do not lose their investments due to the administrator's insolvency.

Is it possible to withdraw the money before the end of the guaranteed fund?

Yes, it is possible to withdraw the money before the end, but a penalty or a reduction in the expected return may apply. It is important to review the fund's conditions before investing.

What types of risks are covered by guaranteed investment funds?

Guaranteed funds cover the risk of capital loss, but they do not cover other risks such as inflation or loss of purchasing power. It is important to understand exactly what is guaranteed.

How is the guaranteed return calculated in an investment fund?

The guaranteed return is set at the time of investment and can be fixed or variable depending on the type of fund. Generally, it is expressed as an annual percentage and is paid at the end of the agreed period.

Can I invest in guaranteed investment funds if I am a beginner in investments?

Yes, guaranteed funds are a suitable option for beginners due to their low risk. However, it is recommended to inform yourself well and consult a financial advisor before investing.