{"id":5710,"date":"2018-06-15T09:00:30","date_gmt":"2018-06-15T07:00:30","guid":{"rendered":"https:\/\/my-life.lu\/?p=5710\/"},"modified":"2026-01-08T14:36:47","modified_gmt":"2026-01-08T13:36:47","slug":"what-is-a-sicav-30030","status":"publish","type":"post","link":"https:\/\/my-life.lu\/en\/what-is-a-sicav-30030\/","title":{"rendered":"What is a SICAV?"},"content":{"rendered":"

Are you interested in the world of investment but can\u2019t get your head around all that financial jargon? myLIFE is here to help you decipher some of the different concepts and structures out there. Today\u2019s topic: SICAVs.<\/p>\n

UCITS (Undertakings for Collective Investment in Transferable Securities) are just one type of fund in Luxembourg. They are usually targeted at retail investors and most commonly take the form of a SICAV (Soci\u00e9t\u00e9 d\u2019Investissement \u00e0 Capital Variable), i.e. an investment company with variable capital. Is this already giving you a headache? Don\u2019t panic, we\u2019re not going to confuse you with the technical aspects of funds or go overboard with acronyms.<\/p>\n

A SICAV is quite simply a fund intended for anyone wishing to delegate management of their investments to a specialist, rather than spending too much time tracking the financial markets themselves. So, with a SICAV you don\u2019t need to be an expert to be able to invest in the stock market.<\/p>\n

How does it work?<\/h2>\n

A SICAV is a public limited company whose shares are offered to the public, and whose sole purpose is to invest in securities (or other liquid financial assets), spreading investment risks and allowing investors to benefit from the results of managing their assets. A SICAV\u2019s share capital is always equal to the value of its net assets, hence the \u201cvariable capital\u201d in its name. Regulated in Luxembourg by the CSSF (Commission de Surveillance du Secteur Financier), it has a board of directors, a general meeting and shareholders (the investors). It may be independent or set up as a subsidiary of a bank or insurance company.<\/p>\n

In practice, a SICAV collects money from different investors and passes it on to a professional fund manager, which invests it in securities (equities, bonds, etc.). By buying, selling or even swapping securities, this professional takes care of the fund portfolio\u2019s day-to-day management (a SICAV cannot manage assets that are not included in its portfolio). Its aim is to obtain the best possible return for investors while following the SICAV\u2019s investment strategy.<\/p>\n

Different types of SICAV<\/h2>\n

There are different types of company, whose investment policies carry varying degrees of risk. The main ones include equity SICAVs (high risk, aiming for good long-term profitability), bond SICAVs (more secure, targeting average returns), diversified SICAVs (investing in both equities and bonds to generate the highest possible capital gain), and money market SICAVs, also called cash SICAVs (short-term investment with low risk but also low returns). The decision on where you should put your money will depend on your objectives and investor profile<\/strong><\/span><\/a>.<\/p>\n

To enable investors to make an informed choice, a SICAV is required to list all of its characteristics in a prospectus that it must provide to investors. This document describes the fund\u2019s objectives, investment strategy, risks and charges. While it is essential to know what you are getting yourself into, trying to read and understand the whole prospectus may prove tricky! This is why we have the KIID: the key investor information document.<\/p>\n

A KIID is a document that is standard across the European Union in terms of form and content. KIIDs outline the main characteristics of a fund. This information is intended to help you understand the nature of the product on offer and the associated risks, and to make an informed investment decision. It is limited to two pages and contains the following information:<\/p>\n