SICAVs

A SICAV, or Société d'Investissement à Capital Variable, is a type of open-ended investment fund common in Europe, particularly in Luxembourg and France. It is a collective investment undertaking whose capital varies with the issuance and redemption of its shares. SICAVs are structured as public limited companies with variable share capital, meaning their capital is not fixed but changes as investors buy and sell shares.

The primary purpose of a SICAV is to pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, and other financial instruments. Investors in a SICAV own shares of the company, and the value of these shares is directly linked to the net asset value of the underlying portfolio. This structure allows investors to benefit from professional management and diversification, even with relatively small investment amounts.

SICAVs are known for their flexibility. They can be established with various investment objectives, catering to different risk appetites and market strategies. They also offer a high degree of transparency, with regular reporting on their holdings and performance. As a variable capital company, SICAVs are typically managed by professional fund managers who make investment decisions on behalf of the shareholders. The open-ended nature means that the company creates new shares when investors subscribe and redeems shares when investors wish to exit, ensuring liquidity for investors.