Unlike private equity, mutual funds invest in companies traded on the stock market. The main goal is often to beat the PSI-20 index that tracks the performance of the 20 largest national companies by market capitalization (the Portuguese equivalent of S&P 500 index). Since mutual funds invest primarily in the same companies as PSI-20 (with varying percentages), the overall return usually doesn’t drastically deviate from the index. Some mutual funds invest up to 40% in foreign equities or bonds for diversification and potentially higher returns, one of these is Portugal Liquid Opportunities.
Mutual funds don’t have a predefined fund term, meaning that investors can exit anytime. However, you would lose your Golden Visa in that case. You can see available mutual funds in Portugal here under Securities investment funds (Fundos de investimento mobiliário). Most of these are unsuitable for Golden Visa investors, but here’s a small list of those accepting Golden Visa investors.
Highlights:
- More flexible process for entering and exiting the fund (since it’s traded on an exchange)
- Typically no performance fees, but there are exceptions
- Performance can be publicly tracked on a daily bases
Things to note:
- Very few funds to select from
- Mostly invested in energy and utility companies, telcos, financial services, and former monopolies such as the Portuguese postal services (CTT)
- Performance of publicly traded companies have historically been weak in Portugal
- Strongly influenced by general stock market movements
Source: NomadGate
