Comparison of the best indexed pension plans in Spain in 2022
1.- Introduction to the comparative
As there are thousands of pension plans and regulations vary widely from country to country, it is impossible to research each and every one of them. So we are going to focus on pension plans with the following characteristics:
-
for residents in Spain
-
passive management, that is, based on financial products that do not require active management, such as ETFs or index investment funds
-
that you can hire yourself directly online, without having to pay an advisor or intermediary
Taking these conditions into account, we have limited the platforms that offer these indexed pension plans to 7, which are: the market leader Indexa Capital, the young Finizens, inBestMe, Finanbest, MyInvestor, Bankinter's Popcoin entity and the pioneer of indexed pension plans in Spain, the ING bank.
2.- What are indexed pension plans?
They are pension plans that generally have lower commissions. And why do they have lower commissions? This is because they invest in products ofpassive management, usually index mutual funds or ETFs. Passive management requires less work on the part of the manager and therefore commissions decrease. This decrease in commissions directly benefits profitability, since costs and commissions have a negative impact on the profitability of investments, which is accentuated in the long term. Finding a product with low commissions is essential to maximize profitability and that is why indexed pension plans are an excellent alternative.
It is also important to mention that the minimum contribution of indexed pension plans is usually much lower than in current pension plans.
3.- Comparison of indexed pension plans
We now move on to comparing the entities we mentioned earlier. For this we have chosen 9 criteria and they are:
-
The number of wallets
-
The number of pension plans or funds
-
Type of assets in which the pension plans offered by the entity invest
-
The minimum contribution to the pension plan
-
The commissions charged by the entity
-
The existence of rebalancing of the portfolio and, if applicable, the frequency and conditions in which it is applied
-
managed volume
-
Rating MorningStar rating
-
And finally, the existence of a risk tolerance test
number of portfolios
The number of portfolios is quite an important criterion since it will allow us to adjust the pension plan to the risk tolerance profile of each investor and that changes over time. The greater the number of portfolios, the more possibilities you will have to choose the one that best suits your risk tolerance profile. From 4 or 5 portfolios, a portfolio adapted to the majority of investors can be offered. Under this criterion, the ones with the least are Finanbest and My Investor with 2 portfolios, then Popcoin with 3. The podium is shared by Finizens with 5 portfolios, ING and Indexa Capital tie for second position with 10 portfolios each and the one with the most portfolios has is InBestMe with 11 portfolios.
Number of pension plans
The portfolios of the first criterion are made up of combinations of pension funds with different weightings. In this case we find that Finizens and ING Naranja have the most pension funds with 5. In the case of Finizens, each fund constitutes a portfolio by itself. They are mixed funds that have a different combination of fixed income and variable income. However, ING Naranja has 5 pension funds (3 variable income and 2 fixed income) that, when combined with different weightings, generate 5 additional portfolios. After these, Popcoin comes with 3 pension funds, which, like Finizens, constitute one by one the three portfolios that Popcoin owns. With two funds are all the others. As we can see, the first criterion is more important than this one. From the investor's point of view, it doesn't matter if the entity needs 2 or 5 funds to create 10 different portfolios.
It should also be mentioned that, although MyInvestor only has 2 of its own pension funds, many more pension plans from other entities can also be contracted there, so in theory through combinations of these, many more portfolios could be obtained. In fact, it is even possible to purchase Indexa Capital plans through MyInvestor.
Types of assets you invest in
The next criteria is the type of assets in which you invest. In this article we only show you mostly indexed pension plans, so the assets are in almost allinvestment fundsindexed andETFs. That is, they are very diversified. To find out exactly how the portfolio is made up, it is best to take the risk tolerance test and see for yourself the type of indexed pension plan that they offer you for your investor profile. It is worth mentioning that both InBestMe and ING carry out hybrid management by including active management funds for fixed income products, which, as we will see a little later, makes them somewhat more expensive. Special mention should be made of Finizens, which includes gold and real estate investment funds or REITS in its pension plans, adding a degree ofdiversificationextra when leaving the classic fixed income and variable income scheme.
eleven
2
Index Funds and ETFs
10
2
ETFs
10
5
Index Funds and ETFs
5
5
Index funds, ETFs, gold and real estate funds (REITs)
3
3
ETFs
2
2*
Index Funds and ETFs
2
2
Index funds, ETFs and actively managed funds
Sources: Data obtained from the official pages of each entity dated 03.13.2022. Data without guarantee.
* MyInvestor only has two of its own pension plans but it has a marketplace where many other pension plans can be contracted
Commissions and costs
Commissions and costs is one of the most important criteria. The lower the commissions, the higher the profitability. And this is definitely the advantage of indexed pension plans compared to the classic pension plans of banking entities. Here we have wanted to separate the cost of financial assets on the one hand and management commissions, depositary commissions and other costs on the other hand. As we have mentioned before, Finanbest and ING Naranja have partly a hybrid management, which means that the commissions are somewhat higher and the total costs are slightly above 1%. Somewhat cheaper and below 1% is Popcoin with total costs of 0.96%. InBestMe improves these figures with total costs ranging between 0.80 and 0.92% depending on the selected portfolio. In third position we find Indexa Capital with total costs of 0.67%. The silver medal would go to Finizens with the lowest intrinsic costs of the plan of all and with total costs of 0.54%. The cheapest pension plan is that of MyInvestor, its commissions are incredibly low and although the intrinsic costs of the plan are not the cheapest, in short it is currently unbeatable with less than 0.50%.
Entity
depository commission
Other costs
Total
Link
0.11%
+
0.30%
+
0.08%
+
0%*
=
0.49%
0.08%
+
0.40%
+
0.05%
+
0.02%
=
0.55%
0.08%
+
0.38%
+
0.05%
+
0.03%
=
0.54%
0.15%
+
0.60%
+
0.10%
+
=
0.11%
0.96%
0.16%
+
0.70%
0.10%
+
+
0%*
=
0.96%
0.37%
0.71%
+
+
0.05%
+
0%*
=
1.13%
0% - 0.07%
0.85% - 1.25%
+
+
0%
+
0%
0.85% - 1.32%
=
Sources: Data obtained from the official pages of each entity dated 03.13.2022. Data without guarantee
* In many cases these costs (audit, brokerage, etc...) are included in the implicit costs of the plan.
Managed volume
The managed volume criterion gives us an indicator of the popularity of this pension plan among Spanish investors. A higher volume of managed capital helps to reduce the costs related to the management of the plan, which we have mentioned before and which were together with the commissions. This value changes daily so here we put the values for March 2022.
Although some of the pension plans presented here are still very young and do not have a high volume, the assets in which they invest do have high volumes, which provides stability and liquidity. It is worth mentioning that the volume shown here refers to the managed volume of the pension plans, but the entities compared not only have pension plans but also have more products, so the managed volume is much higher. The three youngest entities (InBestMe, Popcoin and Finanbest) are also the ones with the lowest managed volume. It takes time and logically good results to attract investors. Both MyInvestor and Finizens are doing a great job and this is reflected in the evolution of their managed volume, which is already above €30 million. Indexa Capital is about to reach the magical figure of 200 million euros in volume managed in pension plans. But without a doubt, ING is by far the entity that manages the greatest volume.
Morningstar rating rating
For those of you who have never heard of MorningStar, this is a well-known financial analysis company that, among other functions, has its own valuation rating for all kinds of financial products, including pension plans called the MorningStar Rating.
The Morningstar rating is an exclusively quantitative investment product rating based solely on past risk and return calculations, therefore no subjective or qualitative factor is involved in the fund's assessment. We must emphasize that this rating is not an indicator of good future behavior. The fact that an investment product has performed well in the past does not mean that it will continue to do so in the future. However, it does serve as a first guide to compare products within the same category and is widely used in the financial sector. Both InBestMe and MyInvestor and Popcoin do not yet have a MorningStar Rating as they are less than 3 years old. This does not mean that they are better or worse, but that this information is not yet available. Indexa Capital have aplan with 4 stars and the other with 3, the simple mean is 3.5. ING pension plans have a simple average of 3.8 stars. Somewhat better valued by Morningstar are the Finanbest plans with 4 stars. The best valued is Finizens which, when taking the simple average, obtains a value of 4.2.
Entity
Morningstar Rating
managed volume
Link
€33.8M
4.2 out of 5
€5.82M
4 out of 5
€1,905M
3.8 out of 5
€196 million
3.5 out of 5
Unrated*
€30.98M
Unrated*
€5.9M
Unrated*
€3.08M
Sources: Data obtained from the official pages of each entity and from the volumes published in Quefondos.com and Morningstar dated 03.13.2022. Data without guarantee.
* Morningstar rating available from 3 years of existence of the pension plan
minimum contribution
ING Naranja does not have a minimum contribution or, to put it another way, the minimum would be to contribute one cent. For the rest, indexed investment plans have a very low minimum contribution, which makes them accessible to all audiences. MyInvestor, Finanbest and Finizens with €10, €30 and €50 respectively. They are followed by InBestMe with a minimum contribution of €250. The only exception is Indexa Capital, which has a minimum of €1,500 to be able to offer such low commissions in a sustainable way. Additional contributions over €1,500 must have a minimum amount of €5. Interestingly, you can contract the two Indexa Capital pension funds through MyInvestor without the minimum contribution of €1,500. All the pension plans in this comparison offer the possibility of scheduling periodic contributions, which we recommend so that you benefit from theDollar-Cost-Averaging.
rebalancing
Rebalancing means restoring the original asset allocation strategy. Due to price fluctuations in the market, the prices of different assets evolve differently, some increase, lose or maintain their value. In a long-term strategy, it is important to frequently restore the original asset allocation. In the comparison, you see that all the pension funds offer rebalancing, and you can also observe the periodicity and the percentage from which the entity will rebalance your portfolio. The lower this percentage, the more true your portfolio will be to your original asset allocation. This service is performed automatically without you having to request it.
Risk tolerance test
To finish this comparison, we come to the last criterion, the existence of a test to determine your propensity or aversion to risk. Except for MyInvestor and ING Naranja, they all offer this test. This test asks you about your age, the age at which you want to retire, the annual amount you want to contribute to the pension plan as well as the percentage of money you can tolerate losing. With these types of questions, your investor profile is created and then the most appropriate portfolio is recommended within the selection of each entity. Indeed, this test is offered by entities that have a larger number of portfolios and the selection is not so trivial.
Entity
Minimum initial investment
rebalancing
Risk tolerance test
Link
€0.01
No
No
€10
No
No
€30
Deviation > 5%
Yeah
€50
Weekly
Yeah
€250
Deviation > 3%
Yeah
€1,000
Quarterly
Yeah
€1,500
Variation > 2.5%
Yeah
Sources: Data obtained from the official pages of each entity dated 03.13.2022. Data without guarantee.
4.- Conclusions
The seven entities are the best options on the market right now to invest your money in the long term in pension plans.The one that has convinced us the most at Finizens. It has very low commissions, with a very high rating in MorningStar, it has a good number of portfolios offering coverage for different risk profiles and it has a maximumdiversificationadding gold and real estate funds to the classic mix of equities and fixed income.
If you opt for hybrid management, both Finanbest and ING are good options. In the case of the latter, it also has the endorsement of a large bank like ING and a 4-star MorningStar rating. De Finanbest highlights the simplicity of its portfolios.
Among the three newest entities among the MyInvestor, InBestMe and Popcoin pension plans, we have been very convinced by the lowest commissions in the MyInvestor market together with the low minimum contribution in addition to the possibility it offers to contract many plans from other entities. At InBestMe we really like the large number of portfolios that cover all possible types of investors in addition to their good risk tolerance test. Popcoin also has the endorsement of Bankinter in addition to highlighting the simplicity of its portfolios.
However it isIndex Capitalin our opinionThe best entity if the initial contribution of €2,000 is not an obstacle.It has the largest managed volume of index pension funds, is very popular and also has a good MorningStar rating.
All the indexed pension plans shown in this comparison seem very interesting to us, otherwise we would not have shown them to you. Now, after this courseour recommendation is to open two pension plans, one at Finizens and the other at Indexa Capital. These two indexed pension plans are the best in Spain at this time in terms of commissions, diversification and profitability. Hiring these two pension plans you will be at the top of all the criteria mentioned in this video and you will have ultra-diversification. We also recommend automating contributions on a monthly basis and being aware of not exceeding contribution limits between the two plans.
As from 01.01.2022 the maximum contribution limit has been reduced to €1,500 and this is in turn the minimum contribution from Indexa Capital, it is no longer possible to open these two pension plans from the beginning. The year you sign up for the Indexa Capital pension plan, you must not make any contribution to another pension plan. You can also hire Indexa Capital's pension plans through MyInvestor and the year that the contributions have exceeded €1,500, then you can transfer the pension plan to one of the portfolios managed directly by Indexa Capital.
5.- Summary table
Media Rating Morningstar | 3,5 de 5 | 4,2 de 5 | Sin calificación | 4 de 5 | Sin calificación | Sin calificación | 4 de 5 |
Volumen gestionado
(planes de pensiones) | 196 M€ | 33,8 M€ | 3,08 M€ | 3,11 M€ | 4 M€ | 30,98 M€ | 1.905 M€ |
Tipos de activos | ETFs | Fondos indexados, ETFs, Fondos inmobiliarios y oro | Fondos indexados y ETFs | Fondos indexados, ETFs y gestión activa | ETFs | Fondos indexados y ETFs | Fondos indexados, ETFs y gestión activa |
Número de carteras | 10 | 5 | 11 | 2 | 3 | 2 | 10 |
Número de planes de pensiones | 2 | 5 | 2 | 2 | 3 | 2 | 5 |
Inversión inicial mínima | 1.500 € | 50 € | 250 € | 30 € | 1.000 € | 10 € | 0,01 € |
Costes y comisiones totales | 0,54% | 0,55% | 0,96 % | 1,13% | 0,96% | 0,49% | 0,85 % - 1,32 % |
Rebalanceo | Variación >2,5% | Semanal | Desviación superior al >3% | Desviación superior al >5% | Trimestral | No | No |
Entidad gestora | Caser Pensiones | Caser Pensiones | GVC GAESCO | PSN | Bankinter Seguros de Vida, S. A. | MERCHBANC, E.G.F.P., S.A.U | Renta 4 Pensiones SGFP, SA |
Entidad depositaria | Cecabank | Cecabank | Banco Sabadell y
BNP Paribas | Banco Santander | Bankinter, S. A. | BNP Paribas Securities Services | CACEIS Bank Spain |
Test de tolerancia al riesgo | Si | Si | Si | Si | Si | No | No |
Entidades | Media Rating Morningstar | Volumen gestionado
(planes de pensiones) | Tipos de activos | Número de carteras | Número de planes de pensiones | Aportación mínima | Costes y comisiones totales | Rebalanceo | Entidad gestora | Entidad depositaria | Test de tolerancia al riesgo |
|---|---|---|---|---|---|---|---|---|---|---|---|
3,5 de 5 | 196 M€ | ETFs | 10 | 2 | 1.500 € | 0,54% | Variación >2,5% | Caser Pensiones | Cecabank | Si | |
4,2 de 5 | 33,8 M€ | Fondos indexados, ETFs, Fondos inmobiliarios y oro | 5 | 5 | 50 € | 0,55% | Semanal | Caser Pensiones | Cecabank | Si | |
Sin calificación | 3,08 M€ | Fondos indexados y ETFs | 11 | 2 | 250 € | 0,96% | Desviación superior al >3% | GVC GAESCO | Banco Sabadell y
BNP Paribas | Si | |
4 de 5 | 5,82 M€ | Fondos indexados, ETFs y gestión activa | 2 | 2 | 30 € | 1,13% | Desviación superior al >5% | PSN | Banco Santander | Si | |
Sin calificación | 5,9 M€ | ETFs | 3 | 3 | 1.000 € | 0,96% | Trimestral | Bankinter Seguros de Vida, S. A. | Bankinter, S. A. | Si | |
Sin calificación | 30,98 M€ | Fondos indexados y ETFs | 2 | 2 | 10 € | 0,49% | No | MERCHBANC, E.G.F.P., S.A.U | BNP Paribas Securities Services | No | |
3,8 de 5 | 1.905 M€ | Fondos indexados, ETFs y gestión activa | 10 | 5 | 0,01 € | 0,85% - 1,32% | No | Renta 4 Pensiones SGFP, SA | CACEIS Bank Spain | No |