What kind of investments are there?
In the same way that you can opt for a bus, car or bike in order to go from A to B, you also have a variety of investment options to reach your goals.
Every asset is different. We all look at risks and opportunities in different ways. And we all have different plans and goals.
For all these reasons, ING offers a variety of options to those wanting to invest. The range of choice is wide enough for everyone to find what they are looking for. And it’s sufficiently well organised so you won’t get lost in the options.
Note: whether or not an investment is right for you depends on your investor profile. Here are a summary of the options:
1. Personal pension plan
Already have a savings buffer? For most people, the next step is a pension savings plan. It’s a good way to supplement your statutory pension later while taking advantage of potential tax breaks now. Read more about saving for your pension.
2. Investment funds
A fund is a ‘basket’ of various investment products. A share fund can include dozens or even hundreds of shares. A bond fund is also made up of various bonds. There are also mixed funds, which may invest in both shares and obligations and/or other financial products simultaneously, depending on the fund.
An investment fund is often actively managed. That means that a team of investment experts select the shares and/or bonds, monitor investment performance and risks etc. Some funds also apply strict sustainability criteria (regarding environment, social and corporate governance).
There are around ten thousand investment funds. To keep it manageable for you, ING offers a carefully curated short list of funds. It consists of 55 investment funds from five respected fund managers.
3. Investment life insurance policy (Branch 23)
A Branch-23 investment life insurance policy is a contract in which your capital is trusted to an insurer who invests it in investment funds. So, the capital and return are not guaranteed. A Branch-23 policy is an attractive product if you want to plan the future transfer of assets in line with your wishes.
You can, for example, designate the beneficiaries to receive your capital at your death. The inheritance rules and rights are subject to Belgian regulations.
4. Structured products with capital protection
A structured product with capital protection may be a solution for those seeking both return and capital protection. With these investments, the invested capital is (partially) protected, but the profit is usually not known in advance.
A structured product usually has a fixed term of, for example, three, five or seven years. At the end of the term, you will receive your invested capital back from the issuer (or the guarantor), except in cases of bankruptcy. Any profit distribution (coupon) is dependent on a pre-determined scenario (for example, the evolution of an index or an interest rate).
5. Shares and bonds
In addition to bond or share funds, you can also invest in individual bonds and shares (if it is appropriate for your investor profile).
When you buy a bond, you are really lending money to the bond issuer. The issuer is usually a government or company. In exchange you receive an interest payment (coupon) on a regular basis. When the bond matures, the company or government repays the loaned capital. Bonds are generally less prone to risk than shares are, so their potential return is also somewhat lower.
What you need to know about buying shares is that they are an (exchangeable) proof of participation in a company’s capital. As a shareholder you are therefore a partial co-owner. Shares routinely generate potentially higher returns than bonds do. That is why shares are often higher risk than bonds.
6. Tracker Funds (ETFs)
A tracker fund (Exchange Traded Fund) ) follows a specific index of shares or bonds. Invested in a BEL20, the Dow Jones Industrial Average or S&P500 tracker? Then your investment is a product that follows 20, 30 or 500 stock-exchanged shares, respectively. Tracker funds offer the following advantages:
- You are investing in a product that follows an entire index in one stroke. This has the effect of spreading your investment.
- Transparency: you always know which shares or obligations the tracker fund is invested in.
- They follow only one index, so no active management is required. This means that they are cheaper than investment funds, on average.
Tracker funds follow an entire index - no more and no less - which is the reason they also follow components that perform less well. If you opt for a tracker, you cannot select the components. And just like every other investment product, tracker funds do have risks.
Starting to invest
To begin investing, you will first need to fill in a questionnaire. An investment adviser can assist you. The answers you provide help create your investor profile. They are also a way to get a good idea of your knowledge and experience in investing, as well as your goals, financial situation, your attitude to risk and investment horizon (the number of years you can go without having access to your money). This enables your adviser to offer the investment product or advice that is best suited to you.
ING does not provide customers advice on individual shares, bonds and trackers.
Want to manage your own investing? Or would you rather be advised by an investment expert? At ING you have the choice.
How do I start?