In the race for the PIRs, the tax-free individual savings plans introduced at the end of 2016 by the Stability Law, Banca Sella could not miss out and in fact took the field with two new funds, one balanced and one equity but with one particularity: attention to small investments, from 50 euros upwards, to gradually attract new customers who are thinking of medium-long term investments with costs in line with those of mutual funds. Nicola Trivelli, CEO of Sella Gestioni talks about it at FIRSTonline.
Even the Banca Sella Group, with Sella Gestioni, has decided to focus on PIRs by launching two Funds: what are the characteristics of the two funds and what is the target of savers you are addressing?
As a Management Company, last year we closely followed the battle waged by Assogestioni to bring individual investment plans to Italy as well. After several attempts, the project was finally completed in the context of the 2017 Budget law which allowed our country to align its legal system with that of countries such as France and the United Kingdom, where similar instruments have already existed for years.
As far as we are concerned, we have decided to offer our customers two different plans. A few weeks ago we launched a new product on the market characterized by the requisites required by the legislation according to which at least 70% of the total value of the PIRs must be invested in financial instruments issued or entered into by Italian or foreign companies with permanent business in Italy. Furthermore, at least 21% of the total value of the fund must be invested in instruments not issued by companies listed on the Ftse Mib. Going into detail, the "Investimenti Bilanciati Italia" fund launched by Sella Gestioni was designed for investors who have a moderate risk profile (3 on a scale from 1 to 7) and invest in equity instruments, up to a maximum of 40%, bonds and money denominated in euro. The aim is to accompany the customer in the long term, allowing him not only to exploit the tax advantage provided by law, i.e. the exemption from taxation of income generated by investments held for at least 5 years, but also to exploit the potential of a product that if desired, he can also be held for life.
What does the second proposal consist of?
The second proposal is “Investimenti Azionario Italia”: our Italian equity fund, with a history spanning 23 years, on the market since 6 April with the new Pir class. We launched it in 1994 and since then it has returned 40% above its benchmark, averaging just under 2% a year. In the last 5 years if we compare it with Etf iShare FtSe Mib we have had a superior performance of 20 points.
“Investimenti Azionario Italia” invests entirely in equity instruments denominated in euro and is therefore aimed at customers with a slightly higher risk profile.
Why should savers prefer the Banca Sella Group's Pir to those of other managers? What makes your products different from others?
The reason for the great success of the Investimenti Azionario Italia equity fund is due to a dedicated team of managers and analysts who have a direct relationship with all the companies we invest in and carry out continuous checks and evaluations. On the Italian share this management really creates an overperformance because getting to know the individual realities closely creates difference and value. All this from the point of view of an Italian asset management company. We know what we invest in and in a medium-long term perspective such as that which characterizes PIRs we are able to rely on the most solid and reliable companies.
Costs seem to be a critical point for PIRs: what do you expect for entry, management and performance commissions?
We have identical pricing to what we had previously. As far as Ezionario Italia is concerned, the management commission on PIRs is the same as that of the already existing retail class, ie 1,825%. The performance data I mentioned earlier is net of this fee. As far as entry commissions are concerned, it is the placer who decides, often and willingly they are not applied and in any case they cannot exceed 2%. There are no penalties or exit fees.
The balanced fund instead has a commission of 1,5%, in line with the balanced equity products. Also in this case no penalties and exit commissions are applied. Instead, those of entry, as for the share, depend on the placer.
Sella Gestioni seems to focus on small initial investments in PIRs (500 euros is enough): why?
According to the law, with the Pir you can invest up to a maximum of 30 thousand euros in a year and up to a total of up to 150 thousand euros over the life of the Pir, provided that the investment is maintained for at least 5 years. This feature drives us to focus on efficiency. We also want to give even the smallest customer the opportunity to make a profitable long-term investment. Our advice is to always focus on PACs (accumulation plans) without creating barriers and without limiting ourselves to private customers only.
Our savings plan is based on a minimum investment of 50 euros, while with the Pic (capital investment plan) the base is 500 euros. With these figures, not only are we able to enter the market gradually, limiting and mediating risks, but we are also able to better control the emotionality associated with volatility at times when the market is negative. The strong points of an investment in funds remain valid thanks to a careful diversification of the financial assets that we select and active portfolio and risk management.
The Agenzia delle Entrate is about to issue a circular which will allow PIRs to be made out to minors as well: will this novelty push grandparents and parents to invest in PIRs for their children?
Absolutely, it is a policy that Banca Sella also follows with pension funds. In the past, grandparents and parents put 50, 100 euros in savings accounts in order to guarantee a future for their children and grandchildren, today the possibility is given to do so through a long-term investment plan and it is very interesting. The details of the legislation regarding minors are not yet clear, we are waiting for clarifications from the Ministry of Economy and the Revenue Agency. But if expectations are confirmed, they could also become a means of creating financial education from an early age and to allow young people to deal with savings. Abroad there are already forms of savings for minors and they are having excellent results.
Can PIRs also work for social security purposes as an alternative to pension funds?
The PIRs have a different purpose and management method. The pension fund is deducted from the taxable amount and provides an immediate tax advantage thanks to the deduction of the €5.164,57 envisaged by the legislation, thus creating a return already on the instant payment. The goal is to build a pension plan that supplements the compulsory one, allowing the individual to have more disposable income after retirement.
The Pir are instead an instrument that can accompany the saver for life. The tax advantage is on potential returns. Abroad, especially in France and the United Kingdom, individual savings plans have worked because they have become a habit that has changed the financial culture of investors. In Italy this culture does not exist yet and today we have an excellent opportunity to create it, while at the same time making sure that these savings help small and medium-sized enterprises.
Among the small and medium-sized enterprises in which the PIRs must invest by law, will you prefer those in your area of origin (Biella and Piedmont) or will you move across the board and according to which criteria?
Our investable universe is made up of all Italian companies also because, being a panorama that is not too broad, it is right not to have territorial limitations. Indeed, what we want to do is find excellence in the various geographical features. Very successful niches, those companies that during these years of crisis have managed to go ahead and have got us out of trouble.
We look at all the small and medium-sized companies existing in Italy and to choose the best we base ourselves on their financial efficiency and their performance over time. We focus on companies that respect a series of parameters: the analysis is based on the business, on management, on the rate of innovation in the sector to which they belong, on the ability to create positive flows in the future and, as mutual funds, obviously also on the ability to guarantee liquidity. We remind you that the PIRs are not only advantageous for investors, but also for companies that manage to have an alternative financing channel to banks.
