The investment has just left behind a hectic and bumpy year. The coronavirus first sparked a stock market debacle, fanned the fixed income ghosts of 2012, and restored optimism with the recent arrival of Covid vaccines. All this has been felt in the savings of Spaniards and in the industry of investment funds and plans. Ãngel MartÃnez-Aldama, president of the sector’s employers’ association, Inverco, is optimistic for this year but warns that “this is not the time to reduce incentives to save, and less to save in the long term.”
How is the sector facing the year 2021?
2020 has been marked by the pandemic and a health crisis that has resulted in a crisis in the markets that was straightened months later by several factors: the intervention of the central banks, which acted in a rapid and coordinated manner; the action of the political authorities, with liquidity and public spending measures, and the serenity and maturity of savers, who have understood that these investments are medium and long-term. Now there is a lot of liquidity and savings available in the markets and our challenge is to continue providing service to customers to channel it and also do so in a scenario of low interest rates. In addition, we have the challenge of digitization, investment in technology and the development of ESG, among other tasks.
The Spanish have increased the savings rate precisely because of this crisis. Can that make many of them dare to bet on the investment?
Obviously, if the savings rate increases, contributions to subscriptions in mutual funds or pension funds will always increase. The higher the savings rate, the greater the volume to invest in any type of asset. From this point of view, it is positive at the individual level, but it is also positive for the country. States with low savings rates are more dependent on foreign investment, and foreign investors are less stable and more volatile.
In the last PGE, the Government has promoted some measures that directly affect this particular saving. For example, it has included a reduction of 8,000 to 2,000 euros in the maximum deductible contribution in individual pension plans. How do you rate this measure?
This is not the time to reduce the incentives to save, and less to save in the long term. We understand and share the Government’s position to stimulate business plans and we see it important that the employment system be developed because it was an anachronistic situation compared to most European countries and the OECD. Now, it should not be done at the expense of individual plans. Developing and promoting employment systems is not incompatible with developing and promoting individual systems. Of course, I would like to clarify that we do not consider this to be an interference in the management of the private sector. The project the Government is working on is an employment pension fund promoted by the Public Administration but managed by private managers. Therefore, there will be a public promotion by the Ministry but private management by specialized entities. That said, hopefully those pension funds will be launched this year and a default assignment system can be established that is not merely voluntary, but rather that from collective bargaining or from the rule, a certain obligation is stipulated so that the workers in Spain can contribute to a long-term pension savings system and benefit everyone
.
While all this is put in place, the main losers are the small savers.
Yes it is. Perhaps a transitional period or a higher limit should have been set. We had proposed a limit of 4,000 euros and that would imply that 15% more of the participants could make contributions, around 600,000 people. But the limit has been set differently and must be accepted. We will see if tomorrow can be increased. Any saving is essential and the advantage of this illiquid saving is that it is financing the economy, because it is not withdrawn as a fund or a deposit.
Another instrument that has starred in these months have been the sicavs. The Government has not finally made any changes to the PGE, but it is working on amendments that will go into the Law Against Tax Fraud. How does this influence investors? Can you consider investing your money in countries other than Spain?
If the amendment is finally approved, it will mean establishing an additional requirement for Spanish sicavs compared to the sicavs of the rest of the EU countries that are already marketed in Spain. So far we already have that requirement of 100 investors [mariachis] that the rest of the countries, except Portugal, do not have and if they now add a minimum investment of 2,500 euros, it will establish a further disadvantage of our products compared to our international competitors. They will have a better chance of selling theirs than ours in Spain. It does not seem that this is the most appropriate way to promote management in Spain. It has also been published that in this amendment there will be a transitional regime so that the shareholders of sicavs could transfer their investments to other IICs. If so, at least the option would be given to those who have bought shares in a sicavs under certain requirements that are now being changed. They would be given a choice of exit. What is certain is that these changes in the Spanish sicavs would be a very negative blow compared to other EU countries.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
