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Disclaimer: I'm not an expert at all, but I try to be informed about investments and am from Spain, so here are my 5 cents. As far as I know, the advantages of
by Al-Khwarizmi 9y ago
Disclaimer: I'm not an expert at all, but I try to be informed about investments and am from Spain, so here are my 5 cents.
As far as I know, the advantages of investing in index funds are global. The idea is that index funds charge less fees. Actively managed funds charge more because they have a team of experts deciding what to buy and sell, but it has been shown that in practice most of them don't manage to significantly beat the indexes, so as the returns are similar, you tend to be better off with lower-fee funds (i.e. index funds).
This is definitely true in Spain, in fact, even truer than elsewhere if you are buying funds from big banks (e.g. the funds offered by Santander, BBVA, etc.) as these typically only want to sell you their own funds and they charge really high fees, higher than in other countries AFAIK.
In fact, if you aren't already doing so, you should look at the fund catalogues of smaller banks and online banks (e.g. I use Self Bank, but there is also Renta4, Tressis, and probably some more). Those offer international funds from management firms other than themselves, and charge smaller fees.
BTW, this is supposed to become less of a problem with a new European directive being passed (MIFID II), which will impose a cap on the fees for distributing funds. Then probably Spanish banks will start offering international funds (BBVA is already preparing for this, I think) with less fees. They're lobbying against it, though, so who knows.
But in any case, index funds will still have cheaper fees than actively-managed funds.
PS: For pension funds ("planes de pensiones"), there are fewer options, as there doesn't seem to be such thing as international pension funds. All the pension funds I've seen in Spain are actively managed and charge too high fees, typically around 1.5% (I still have some due to the tax treatment), if anyone knows alternatives it would be interesting.