Investor guidebook

Find out about the benefits of investing and see how to invest step by step.

How does an investment fund work?

How does an investment fund work?

You have already become acquainted with our offer, decided on a particular product and paid money into the account. Thus, you have become a sub-fund participant. Now you should find out what happens to the money you have invested.

A fund participant pays money at the Customer Service Point or directly to the fund’s account. The money is transferred to the Depositary Bank and transaction data to the Transfer Agent. The Investment Fund Company manages money paid by the participant, i.e. it decides which securities defined in the fund’s statute are the most valuable.

The Depositary Bank keeps a register of investment fund assets, including assets recorded in the accounts of fund participants. The Depositary Bank implements the fund’s orders and ensures the performance of the fund’s obligations in accordance with the provisions of law and the statute, through permanent monitoring of factual and legal issues. In addition, it establishes prices of the fund’s assets and participation units.

The Transfer Agent stores data concerning the participants and the transactions they execute. It processes payments and withdrawals into participation units and is responsible for informing the participants about their transactions and the value of fund units.

The Investment Fund Company manages assets and establishes the prices of participation units. It is obliged to provide the participants with reports on its activities.

What does an investor need to know?

What does an investor need to know?

To navigate through the world of finance competently and manage our resources effectively, we should become familiar with a few basic rules of investing. Check out our Investor’s Decalogue and read the important rules.

Investor’s Decalogue is what you should know about investing in general (not only in funds):

  1. Remember about diversification, i.e. portfolio diversity. Investing in funds from different asset classes or different geographical regions will reduce investment risk and simultaneously increase chances of achieving the expected profit.
  2. While planning investments, take the minimal investment period suggested for a given sub-fund into consideration. Investments in equity sub-funds should be planned for at least five years, and in the case of short-term investments, choose sub-funds with mixed investment policies (stable growth and balanced) or bonds.
  3. The purchase of sub-fund units should be performed regularly. This will help you avoid the risk of investing whole capital at the so-called peak.
  4. In constructing the portfolio, follow your own investment risk appetite. If you like dynamic changes in the stock market, invest in long-term equity funds. However, if rapid drops make you nervous, choose safer funds.
  5. While investing in equity funds and determining the acceptance of investment risk, you have to acknowledge and define the maximum acceptable loss. Only then will you find out whether your acceptance of risk fits the stock market.
  6. The financial market is unpredictable. Market prices are the result of Investors’ reactions, and they change depending on the financial and economic situation. That is why expert comments are often full of expressions such as “may”, “hopefully” and “probably we can expect...” Keep this in mind when reading various publications and analyses, and listening to the opinions of experts.
  7. Remember that emotions are your worst investment advisor. If you have already made a loss,  consider if this is the right moment to get out of the investment – withdrawal of the money would make it impossible to make up for your loss.
  8. While planning an investment in a fund, examine it – from the management staff, investment policy set out in the statutes, administrative and management fees, to the after sales service provided to customers.
  9. Past performance of funds does not guarantee future recurrence and cannot be a decisive factor when choosing a fund offer. Instead, pay attention to what the fund’s performance looked like in the last few years, and whether it remained in the leading position.
  10. If you have a short investment horizon, keep your finger on the pulse – think of whether you feel good with what is happening to your investments.

Union Investment TFI S.A. cannot be held responsible for the consequences of decisions made on the basis of this article and its contents.

Loan or regular saving?

Loan or regular saving?

Do you have some savings and are wondering how to effectively allocate them? On the one hand, you would like to make sure that your capital is safe, but on the other you would like to earn some money. What to do?

When we need a certain amount of capital, many of us often wonder which option is better: a bank loan or regular saving. To make a choice, we have to consider not only our current needs and plans, but also the condition of our household finances in the long term-perspective, as well as its financial capacity. We cannot accurately describe the potential risks and dangers arising from bank loans, but before making the final decision, it is recommended to analyse the risks and profits arising from both solutions further.

If we want to accumulate PLN 100 thousand, we can do this in two ways: take out a loan or opt for regular saving. If we take out a loan for the period of 10 years with an interest rate of 6% per annum, we have to pay monthly instalments of PLN 1,110.

However, there is another way to use the money. Instead of keeping your funds on a bank account, we can invest them - money allocated  for example in one of the Saving Plans can bring much bigger profit. With an interest rate of 6% per year and saving PLN 1,100 every month, our gains after 10 years would amount to approx. PLN 180 thousand*.

Both solutions have their pros and cons. The most important, if not the only benefit from taking out a loan is the immediate obtaining of the desired amount. However, apart from quick access to cash, a bank loan involves the fulfilment of many formalities, waiting for the decision of the bank which verifies our creditworthiness, and then the necessity of regular repayments. When we are unable to pay the next instalment, we may be exposed to serious legal and financial consequences, depending on the agreement signed with the bank.

Meanwhile, regular saving and depositing a certain amount of cash every month on our own account gives us mainly a sense of independence from the bank. We do not have to worry about paperwork, agreements and, most importantly, paying monthly instalments. Capital accumulated on our own is the safest financial collateral, both in the case of market prosperity and economic slowdown.

A Saving Plan is not just a collection of financial means, but most of all their multiplying. When we make payments regularly, we stand a good chance that after 10 years we will have more capital – regardless of the Plan’s structure.

However, the final decision should be made on the basis of personal preferences and financial situation.

* The above calculations do not include additional fees and commissions.

Which are better: funds or deposits?

Which are better: funds or deposits?

Do you have some savings and are wondering how to effectively allocate them? On the one hand, you would like to make sure that your capital is safe, but on the other you want to make money. What should you choose in this situation?

You can choose between a deposit and a solution less known and less used, but potentially more profitable – namely, participation in an investment fund tailored to your needs. An investment fund is a mean of capital allocation designed not only for people with high risk exposure, but also for persons who are careful; for those who are just entering the world of finance, and for those who are really passionate about investing.

Money in the hands of experts

You do not have to be an expert in the field of finance – responsibility for the invested money lies with a fund manager licensed by the Polish Financial Supervision Authority (KNF). He or she will constantly analyse the results of listed companies, read documents and financial reports. In addition, they will collect information on individual companies included in the asset portfolio of each customer.

When choosing a company to which we want to entrust our money, it is recommended to refer to independent ranking lists. One of the most famous is the oldest ranking developed by Rzeczpospolita journal and the analytical company Analizy Online, published annually since 2003. Union Investment is the only investment fund company placed on the podium of the Rzeczpospolita and Analizy Online ranking since its first publication: 8 times as leader and twice as vice-leader.

Is a fund better?

  • Investment risk: while selecting an investment fund, at the beginning you specify the level of acceptable risk: it may be minimal, low, moderate, high or highest. It’s up to you whether you are able to risk more to get higher returns, or whether you prefer safer assets with lower profits. Union Investment offers a variety of funds, from the safest ones, dealing with investments in Treasury securities and debt securities, to those investing in the shares of companies located in Central and Eastern Europe.
  • Investment horizon: in the case of funds offered by Union Investment, investment periods are very diverse, e.g. UniKorona Pieniężny offers smaller, but systematic profit in just 12 months, while in the case of UniAkcje: Nowa Europa our investment should last for a minimum of five years.
  • Portfolio diversification: investing in a fund offers a much wider choice of assets in which you can invest your capital than a bank deposit. At Union Investment, you can decide whether you will invest only in the shares of Polish and/or foreign companies, or whether you prefer to invest in debt and cash securities. With such a diversification of assets, the possible risk of loss is minimized.
  • Flexibility: in the case of open-end investment funds, you can instantly and at every request purchase and redeem the participation units held (entitling to participate in a given fund), and the duration of such a fund as well as the number of its participants are unlimited.

In the case of deposits, both the time horizon and the expected level of profit are pre-determined, while in the case of investment funds you are offered flexibility when it comes to the time period of multiplying your savings. At Union Investment, you decide what and for how long you want to invest in, and everything is monitored by top-class professionals, who manage your capital and ensure that the risk is minimized in the best possible manner.

Carpe diem? Yes, but within certain limits

Carpe diem? Yes, but within certain limits

You are young and have no experience? Don’t worry! We might not find you an employer, but we will give you a chance and resources to enjoy your life in a dozen years or so.

Standing at the threshold of a professional career, you do not think of what your earnings will look like in several years or decades. When making decisions about choosing your first job, you do not think about whether it will be able to guarantee stable income over the decades to come. So far, however, before filling your wallet with golden credit cards and your account with six-figure amounts, you should be cautious and show common sense!

So maybe it is better to reduce spendings and start saving?

The answer is clear: obviously, it is better to start saving as soon as possible. But why? Contrary to appearances, even small, but systematically deposited amounts (properly invested) can bring considerable profits in a few decades. With time, these profits may prove to be one of the most important sources of your income. Because, in the process of saving, the duration of collecting money is as important as the amount of contributions: the longer it lasts, the greater the chance of accumulating considerable capital.

How to choose the best way of collecting long-term savings?

The best and easiest way to ensure oneself financial security is saving with an investment fund or an insurance company. In fact, your money does not lie idle in your account, but is invested.

The first step to start conscious saving is the choice of an appropriate investment company that meets your expectations as to the amount of payments, the duration of the saving process, availability of information on what and at what risk you will invest in, or the presence of additional fees and their amounts.

While examining investment companies operating in the market, you should pay special attention to the quality of their products and services, as well as the market position of individual funds or companies. To make the right choice quickly and wisely, you might be willing to refer to publicly available ranking lists prepared by professionals in the industry, such as the investment fund companies ranking, published annually by the Rzeczpospolita journal in collaboration with the research company Analizy Online. Information obtained in this way allows selecting a fund most tailored to your individual needs and abilities.

How to save money?

Obviously, the sole idea of saving and thinking about future financial stability is clearly rational and right, regardless of age. The question is, though: which way of saving is the most efficient?

Does the Polish market offer a method for raising capital which allows you to simultaneously save money and enjoy your life?

The ideal offer for those who are wise in thinking about the future, but do not want to invest each and every penny, is an offer prepared by Union Investment TFI – namely, the Saving Plan.

What is the Saving Plan?

This is a programme for systematic capital raising, under which you pay the money you have saved to your register (the equivalent of a bank account, but in an investment fund rather than in a bank) on a monthly basis. You can choose between two basic options: in the first one, the money that you pay is invested in a single fund, and in the second one, it can be allocated in up to four funds. In both options you may choose the saving period of five or ten years. Formalities only take a moment – while signing an agreement with Union Investment representatives, you declare the frequency, amount and method of payments; you may choose between cash, bank transfer or fixed payment order.

Saving is the best choice for people with low risk exposure, since it allows obtaining revenue from deposited capital without high risk of potential losses. A Saving Plan at Union Investment is ideal for people who want to think about their future calmly, without worrying about money they saved.

Perhaps you are willing to take a risk, knowing that greater risk entails chances for higher profits. If, instead of safe splashing at the shore, you would like to immediately throw yourself into the deep end, start investing!

Union Investment offers a number of different manners to allocate capital. Depending on your risk tolerance and time period after which you would like to receive your first profits, we provide you with many options: from secure sub-funds (such as UniKorona Pieniężny), where your money will be invested in government securities with low fluctuations in value, to funds with very high level of risk (e.g. UniAkcje Sektory Wzrostu). You can focus on different areas of investment (from domestic markets to the markets of Central and Eastern Europe) and different currencies (from funds in PLN to EUR or USD solutions).

Retirement? Enjoy your life!

Retirement? Enjoy your life!

Although today retirement seems to some of us very far and not very real, sooner or later it will affect everyone. One cannot avoid retirement, so it is worth thinking about it today. If you do not want to worry about what awaits you in a few decades, start saving today with the optional third pillar. The question is, though: “how to do it?”

One of the most effective ways of saving money for retirement is an investment fund. Union Investment offers savings with tax benefits under the Emerytura IKE & IKZE Package, combining advantages of Individual Pension Account (IKE) and Individual Pension Assurance Account (IKZE). The Package is available in one of three options: dynamic, moderate and individual one.

Both dynamic and moderate option are managed over time by our specialists. It means that money is moved between different sub-funds, depending on the age of the customer. The dynamic option consists of several stages: first one at the age of 18-29 – the capital is invested solely in the equity sub-fund, the second at the age of 30-39 – half of the money is accumulated in an equity sub-fund and a balanced one each, and the third, from the age of 40 – the money is transferred to safer sub-funds, such as UniKorona Obligacje. In the moderate option, on the other hand, the share of the equity sub-fund is lower in favour of the balanced sub-fund, which is why it is recommended to persons with a lower risk exposure and expecting more stable, though lower increase in the value of savings.

It is worth considering why, in the case of long-term savings such as retirement savings, we recommend investing in different types of sub-funds. By reallocating, we are able to optimize profits from money entrusted to us. At the beginning of payment period, we invest in the most profitable sub-funds (characterized by the largest growth potential), but over time we move the capital to a safer segment of assets. Owing to this strategy, we protect the capital entrusted to us against possible price drops in the stock market during the last years of investment. Thus we protect the value of the benefits paid out.

Individual option, on the other hand, is an ideal solution for those with a broad knowledge of capital markets and investment products. Within this option, you can choose Union Investment sub-funds in which you want to invest on your own. Moreover, you can change the chosen sub-funds up to 4 times a year.

Not everyone remembers that the main advantage of savings for retirement  through IKE and IKZE are tax benefits, which allows avoiding the so-called Belka’s tax, i.e. tax on capital gains. To avoid paying this tax, one must meet certain criteria:

  • the amount of payments to IKE and IKZE during a year cannot exceed the value stated each year by legislative bodies
  • financial resources can be withdrawn upon the acquisition of pension rights.

If, however, random circumstances occur that may require the withdrawal of money prior to retirement, money collected within IKE and IKZE in Union Investment can be paid out, although the earnings, just like in the case of classic forms of saving, will be reduced by 19-percent tax.

Can a monthly saving of PLN 200 bring us more than PLN 1,700 per month during retirement?

Yes, it can! Let’s study an example.


Enjoy your life in retirement with Union Investment!

Take advantage of Union Investment TFI proposals to retire in accordance with your expectations. Owing to the availability of many saving options, you can be sure that your money gathered for the retirement is invested in the most profitable way.