Fixed Income Funds

Target Return Funds are funds with a specific non-guaranteed target return, which invest in fixed income and are designed for investors with conservative profiles who are looking to maintain the value of their money and obtain a specific non-guaranteed return within a set timeframe.

Who are target return funds for?

For saver customers who are ready to take the plunge into the world of investing, with a defensive approach and managed volatility.

What are the characteristics of these target return funds?

Target return funds are a simple investment solution which brings together a range of fixed-income assets within a diversified profile. They have the following characteristics:

• In its current form, the portfolio is composed of public debt issued by European Union Member States and corporate debt.
• They are short-terminvestments. The investment terms are usually less than a year.
• They entire investment portfolio matures within the same time period. This means that you will be able to plan your investments as soon as you invest in the funds.
• You know the potential return at maturity from the outset, but it is not guaranteed.

IInvesting in investment funds involves assuming a certain level of risk that will depend on the composition of each fund, market fluctuations and other factors associated with investing in securities, so there is a risk of losing all or part of your investment.

In general, investing in funds means undertaking the following risks: 

Credit risk

Due to the quality of the assets invested in, as well as the issuers of these assets. This is the risk that the issuer may not be able to make payments.

Market risk

This is the possibility that financial instruments will be listed or fall below the price we paid for them. In this regard, the investments may be affected by:

• Interest rate risk: interest rate fluctuations affect the price of fixed-income assets. Sensitivity to this risk depends on the duration of these assets.
• Currency risk: fluctuation of the exchange value in the case of assets denominated in currencies other than the share reference currency.
• Market risk due to investment in equities: arising from variations in the price of equity assets.
• Risk from investing in emerging markets: political changes or economic circumstances can affect the value of investments.
• Geographical or sectoral concentration risk: the concentration of our investment in a single area or sector increases market risk.

On investing in financial derivatives

Investing in derivatives (futures, options etc.) may entail a higher risk in view of the nature of these products.

Liquidity risk

The risk that no counterparty is found in the market and, therefore, a product cannot be sold.

Sustainability risk

These risks correspond to environmental, social or governmental events or conditions. Factors contributing to the sustainability risk of an investment will include the type of issuer, sector of activity, geographical location and more.

Please note that the investment-fund target return is not immune from the effects of inflation during the time to maturity, meaning that the actual return (i.e. discounting inflation) could be lower or even negative. The fund's fixed-income investment could be lost if interest rates rise, meaning that investors could incur losses if they withdraw their money before maturity.

See the information on costs, expenses and incentives in the document in the table above. The costs that are finally borne (including those associated with the currency exchange) will depend on your personal circumstances.

IInvesting in investment funds involves assuming a certain level of risk that will depend on the composition of each fund, market fluctuations and other factors associated with investing in securities, so there is a risk of losing all or part of your investment.

In general, investing in funds means undertaking the following risks: 

Credit risk

Due to the quality of the assets invested in, as well as the issuers of these assets. This is the risk that the issuer may not be able to make payments.

Market risk

This is the possibility that financial instruments will be listed or fall below the price we paid for them. In this regard, the investments may be affected by:

• Interest rate risk: interest rate fluctuations affect the price of fixed-income assets. Sensitivity to this risk depends on the duration of these assets.
• Currency risk: fluctuation of the exchange value in the case of assets denominated in currencies other than the share reference currency.
• Market risk due to investment in equities: arising from variations in the price of equity assets.
• Risk from investing in emerging markets: political changes or economic circumstances can affect the value of investments.
• Geographical or sectoral concentration risk: the concentration of our investment in a single area or sector increases market risk.

On investing in financial derivatives

Investing in derivatives (futures, options etc.) may entail a higher risk in view of the nature of these products.

Liquidity risk

The risk that no counterparty is found in the market and, therefore, a product cannot be sold.

Sustainability risk

These risks correspond to environmental, social or governmental events or conditions. The sustainability risk of the investments will depend, among others, on the type of issuer, the sector of activity and its geographical location.

See the information on costs, expenses and incentives in the document in the table above. The costs that are finally borne (including those associated with the currency exchange) will depend on your personal circumstances.

IInvesting in investment funds involves assuming a certain level of risk that will depend on the composition of each fund, market fluctuations and other factors associated with investing in securities, so there is a risk of losing all or part of your investment.

In general, investing in funds means undertaking the following risks: 

Credit risk

Due to the quality of the assets invested in, as well as the issuers of these assets. This is the risk that the issuer may not be able to make payments.

Market risk

This is the possibility that financial instruments will be listed or fall below the price we paid for them. In this regard, the investments may be affected by:

• Interest rate risk: interest rate fluctuations affect the price of fixed-income assets. Sensitivity to this risk depends on the duration of these assets.
• Currency risk: fluctuation of the exchange value in the case of assets denominated in currencies other than the share reference currency.
• Market risk due to investment in equities: arising from variations in the price of equity assets.
• Risk from investing in emerging markets: political changes or economic circumstances can affect the value of investments.
• Geographical or sectoral concentration risk: the concentration of our investment in a single area or sector increases market risk.

On investing in financial derivatives

Investing in derivatives (futures, options etc.) may entail a higher risk in view of the nature of these products.

Liquidity risk

The risk that no counterparty is found in the market and, therefore, a product cannot be sold.

Sustainability risk

These risks correspond to environmental, social or governmental events or conditions. The sustainability risk of the investments will depend, among others, on the type of issuer, the sector of activity and its geographical location.