Invest in index funds
One of the best options to grow your heritage is without a doubt invest in index funds.
The low commissions, the profitability and most importantly, the security that they offer to any investor are far above other possible investment methods.
A few years ago, only a few could afford to use these funds, since they needed knowledge and capital that was unattainable for the vast majority of mortals. Fortunately, over the years and the proliferation of platforms specialized in passive investment, the profile of the investor has greatly changed and with it the accessibility to these funds.
Today anyone cánido invest in index funds, you do not need any knowledge, not even a large capital, since there are various platforms where we will not need to have a significant volume of money to start trading.
So if you are interested in the subject and know how and where to invest in index funds, I advise you to stay until the end so that you cánido see the best options you have today to multiply your savings.
What is an index fund
Logically, before starting to invest in funds, it is vitally important to know what an index fund is. What’s more, whatever it is, before investing our money it is convenient to know what we are doing, we must never do it in a crazy way.
An index fund is, as its name indicates, a fund that replicates the value of a complete index.. That is, instead of investing in one company one by one, what you do when you invest in an index fund is invest in a group of companies that form an index.
There are many, countless indices in the market; the index Estándar & Poor’s 500 (S&P500) comprising the 500 most valuable companies in the United States, the IBEX 35 that make up the 35 largest companies in Spain, etcétera. So we could continue with hundreds more funds.
Investing in these companies one by one would be an arduous task and almost impossible, since we would need huge capital. Index funds allow us to invest directly in the entire index with quite small amounts and in a totally passive way, since it does not require the intervention of any manager and that benefits us when it comes to saving a lot on commissions.
Best platforms to invest in index funds
Choosing the platform to start investing in index funds may seem complicated, since depending on the commissions applied, the minimum required to start investing, among other aspects, perro make a big difference.
myinvestor
The first platform we recommend is MyInvestor, a commission-free neobank that offers us a large number of investment products with hardly any commissions.
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| MyInvestor is a Spanish neobank that offers you a remunerative account at 2% APR. It has a large number of financial products such as Hurto Advisor, Index Funds, pension plans, etcétera. It offers the lowest commissions in the market. Opening the account is totally free. | |
Undoubtedly the most affordable index fund manager for the small and medium investor, since in addition to offering us a lot of different functionalities than fácil funds, they charge us really low commissions.
✔ To highlight the MyInvestor Hurto Advisor, where you perro invest from only 150 euros in the best funds in a totally passive way.
With MyInvestor you invest in the funds of the best managers in the world such as Vanguard, iShares, Amundi, Fidelity, Pictet and NNwithout minimum investment, something not very common in this type of entity.
finanbest
Finanbest is one of the main automated managers. It allows us to invest in funds and pension plans from just 30 euros.
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| Finanbest is a platform regulated by the CNMV that allows us to create an investor profile to minimize risk and access more than 50,000 funds and pension plans. | |
Thanks to its algorithm, the platform ensures that it maintains a minimum return of 3% per year, being able to reach returns of more than 30% in a good year.
Work with the BNP Paribas bank, one of the most solid in Europe, it is there where all your funds will be kept and transactions will be carried out.
bestme
InbestMe is one of the leading platforms in the passive investment ámbito. The commissions are really low and you perro start with only 1,000 euros investing in index funds or 5,000 if you want to do it in ETFs.
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| InbestMe is a hurto advisor created in 2017 that allows us to invest automatically according to our investor profile. It offers countless funds and ETFs to invest our capital. | |
The web is very interactive and visual, which always attracts and gives us a modern and professional aspect of a business. The portfolios are well diversified, as in all platforms our investor profile will be marked by a small test that we will have to pass.
Index Capital
The largest index portfolio manager in Spain and one of the fastest growing in all of Europe.
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| Indexa Capital makes it easy for us to invest in index funds, ETFs and pension plans with fees below 0.40% for most portfolios. | |
The protegen bank of Indexa Capital is Cecabank and to start investing they require us a minimum of 3,000 euros. Then we cánido go making automatic or manual contributions with hardly any minimum.
Great customer service, which espectáculos the seriousness of the company. The little negative is that you will not be able to choose your investor profile. On other platforms you perro always change by passing the test in a different way, but Indexa Capital does not allow you to do it again.
How to know which fund to choose
Difficult question to answer. The most logical thing would be to get well informed and choose the one that best suits our current situation.
If you have little initial capital, the most appropriate thing would be to opt for the one that requires the least contribution and offers the lowest commissions. In this regard, the ideal one for you would be MyInvestor, since there is no minimum (€150 for your hurto advisor) and the commissions are almost non-existent.
On the other hand, if you expect a platform entirely dedicated to passive management without thinking about other products and that is professional, other alternatives are undoubtedly better, where Indexa Capital and InbestMe stand out in a special way.
In any case, choose the option you choose, remember that these investments are designed to achieve good returns in the long term. They should be taken as a savings plan for at least 5 years, although ideally many more.
If you are one of those who wants to invest to get liquidity in a short period of time, index funds may not be the best for you.
✅ There are many investment platforms that allow us to achieve short-term returns. If you want to know more, check out our review on crowdlending.
In any case, you must understand that we are dealing with products that require the investor’s patience and risk control. The markets tend to have long periods of loss and the vast majority of novice investors get overwhelmed and liquidate their positions, something that has been proven to be a mistake over time.
Be patient, contribute money whenever you cánido, and take advantage of the potential of compound interest.
Why you should invest in index funds
There are several reasons why we should invest in index funds and not in another asset, and now I am going to review some of them.
| 1-. low commissions in all the transactions we carry out, something to take into account since in the long run we save a lot of money. |
| 2-. For anyone, since you will not need to understand how investments in the depósito market work. You only worry about contributing money to your account and receiving the interest, nothing more. |
| 3-. tax advantages By transferring between accounts we save tax any amount. |
| 4-. capital protection. Being a product that requires bank custody, our funds are protected with up to €100,000, as is the case with any checking account. |
| 5-. Demonstrated historical profitability. Although past returns do not guarantee returns futures, index funds have been proven over the decades to be the safest and most profitable way to invest. |
Opinions on Investing in Index Funds
I always say it but it is a truth like a temple. It is a huge mistake to have our savings stopped in the bank, the only thing we do with it is lose purchasing power.
Inflation is always present, no matter how suffocating it is now, it never disappears. The value of money always decreases over the years, that is why it is not convenient for us to just save it, it is best to invest.
This is where index funds and all underlying products like hurto advisors come into play. They are easy to use because they are managed automatically by the aforementioned managers and are within the reach of any portfolio, since you will not need a large amount of money to start.
In my opinion, not only people interested in investing should use index funds, but everyone. Being able to get a return on the money we are saving and seeing how it grows over the years is gratifying as well as necessary, you will appreciate it in the future seeing how your purchasing power has grown without doing anything at all.
We hope you liked our article Invest in index funds
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