What is a ‘bevek’ or ‘sicav’?
How does a ‘bevek’ work?
Put simply, a ‘bevek’ is an investment company or an ‘investment undertaking’. It collects monies from individual investors and invests them collectively based on a specific investment policy. Investors who put their money into it become unitholders, or co-owners.
You don't have to be an expert to invest in a ‘bevek’, due to the fact that you leave the management of your investments to specialised fund managers who keep a close eye on the financial markets. Through their activities, therefore, you gain access to a broad and diversified mix of shares, bonds and other assets .
Why does a ‘bevek’ have variable capital?
The capital of a ‘bevek’ increases when new units are issued and investors start buying them. However, investors can also easily sell their units. When that happens, the ‘bevek’ dips into its capital to buy those units back and pay the investor, after which its capital decreases.
One feature of a ‘bevek’ is that it gives investors the flexibility to buy and sell at any time, which explains why its capital is variable. Transactions are carried out at the net asset value on the day in question or at the prevailing market value per unit.
What are the different types of unit in a ‘bevek’?
You can usually choose between capitalisation units and distribution units. The difference between the two is the way in which they pay dividends, or profits, to unitholders:
- Capitalisation units: the ‘bevek’ automatically ploughs dividends back into the fund. This is beneficial if you want to invest long term, since you take advantage of the capitalisation effect, i.e. the income earned on your investment could in turn generate even more income.
- Distribution units: you receive an annual dividend, which means you get paid profits on a regular basis. However, you need to be aware that your dividend may fluctuate each year and that it is subject to withholding tax.
Which charges and taxes are associated with a ‘bevek’?
When you invest in a ‘bevek’ you pay a number of charges, including:
- Entry charges and, in certain situations, exit charges too
- Management fees, which are not additional but have instead been factored into the net asset value of your investment
However, consideration also needs to be given to the following taxes when making an investment:
- 1.32% stock market tax on the sale of capitalisation units
- 30% withholding tax on the dividends paid on distribution shares
- For funds investing more than 10% of their assets in debt instruments, such as bonds, any capital gain realised after investors sell their debt securities is subject to 30% withholding tax
How can you invest in a ‘bevek’?
Now that you know what this type of fund entails, you can get started regardless of whether you’re a novice or more experienced investor . KBC Brussels offers numerous investments that enable you to invest in ‘beveks’. And you don't have to be well off to invest in them either: you can even start with small amounts.