In recent years, actively managed certificates (AMCs) have gained increasing popularity. This trend is due to both the growing offerings from wealth managers and the numerous benefits that AMCs provide. In this blog post, we would like to introduce you to the main advantages of AMCs and explain how Everon can offer you diverse investment strategies with them.
Contents
What are Actively Managed Certificates?
An Actively Managed Certificate (AMC) is an investment instrument that combines the features of structured products and actively managed funds. AMCs provide a framework for various investment strategies, combining characteristics of Exchange Traded Funds (ETFs), bonds, and managed funds. An AMC represents a basket of assets and offers investors a percentage return. These certificates can be traded on secondary markets or exchanges.
Unlike ETFs, an AMC provider is not obligated to purchase the assets. AMCs are linked through contracts that serve as synthetic securities, enabling a flexible composition of assets. An AMC can invest in various asset classes, such as stocks, bonds, commodities, cryptocurrencies, and more.
The Advantages of AMCs
Low minimum investment
Actively managed certificates provide access to a wide range of underlying assets with low investment amounts. These underlying assets can include investments in private markets, funds, and many more. This allows even small investors to invest in assets that are often reserved for institutional investors.
Diversification and Flexibility
AMCs offer great variety as they enable the composition of a broad asset basket in a single certificate. Investors can benefit from wide diversification, reducing dependency on individual assets. Additionally, AMCs can be set up by Everon within three weeks, offering extra flexibility.
Liquidity
Although some assets in an AMC may be long-term and illiquid, an AMC still offers high liquidity. This is because an AMC can be sold on the secondary market, reducing illiquidity. This option makes AMCs very flexible and attractive for investors, as they can access their investment at any time. AMCs are also very transparent regarding the investment. Investors can constantly track the performance of their investment using the ISIN number.
Tradability and Cost Structure
The structure of AMCs allows for easy reallocation of the underlying assets. This means the wealth manager can quickly and efficiently respond to market changes and adjust the portfolio accordingly without the investor needing to take action. Trading costs and fees for AMCs are generally transparent and clearly defined. This makes it easier for investors to understand and plan the total costs of their investments, supporting decision-making.
Conclusion
AMCs offer a variety of advantages and have gained significant popularity in recent years, particularly due to their flexibility and diversification options. Especially for foreign investors who must pay taxes on capital gains, AMCs are attractive as they have no cross-border restrictions. Investors looking for a flexible structure will find the ideal solution in AMCs.
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