What Is Société d'investissement à Capital Variable (SICAV)?
A Société d'investissement à Capital Variable, or SICAV fund, is a publicly traded open-end investment fund structure offered in Europe. SICAV funds are similar to open-end mutual funds in the U.S. Shares in the fund are bought and sold based on the fund's current net asset value (NAV).
Key Takeaways
- A SICAV is an open-ended investment fund structure offered by European financial companies.
- SICAV fund shares are available to the public to trade, with prices that are based on the fund investments' net asset value.
- SICAV stands for Société d'investissement à Capital Variable, which in English translates literally to "investment company with variable capital."
Understanding SICAV
SICAVs are regulated under European law. Their structuring can be guided by either the Undertakings for the Collective Investment of Transferable Securities (UCITS) regulatory framework or the specialized investment fund (SIF) framework.
Most funds follow UCITS law enacted in 2009 by the European Commission to create a harmonized regime throughout Europe for the management and sale of mutual funds. Some SICAVs may follow SIF law enacted in February 2007 primarily for institutional investors.
SICAVs have a board of directors to oversee the fund. Each individual shareholder receives voting rights and has the right to attend the annual general meetings. The term SICAV is an acronym for Société d'investissement à Capital Variable. These funds are most well-known and used in France, Luxembourg, and Italy. Similar to open-end mutual funds, SICAVs do not have a fixed number of shares traded in the public market.
SICAV vs. SICAF
SICAVs are often contrasted with SICAFs. SICAFs are similar to closed-end funds in the U.S. SICAFs are an acronym for Société d’Investissement à Capital Fixe. They are traded on public market exchanges and operate with a fixed number of shares.
UCITS structured SICAVs are actively cross-border marketed in Europe. They are one of Europe’s most actively traded investment products. The funds trade on exchanges in their designated currency.
Examples of SICAV Investment Funds
Invesco is one investment advisor that offers numerous SICAV funds. Some of its SICAV funds include:
- Invesco ASEAN Equity Fund
- Invesco Balanced-Risk Allocation 12% Fund
- Invesco Developed Small and Mid-Cap Equity Fund1
What Is the Difference Between Mutual Funds and SICAV Funds?
SICAV funds are offered in Europe. They are incorporated as public companies and investors become shareholders when they purchase shares. Mutual funds pool together money from many investors and are structured as open-end investment companies.
What Is the Difference Between a UCITS Fund and a SICAV Fund?
An Undertaking for Collective Investment in Transferable Securities (UCITS) fund is a type of European investment fund and is similar to U.S. mutual funds and exchange-traded funds (ETFs). They are open-ended, transparent, and can trade cross-border across EU countries. A Société d'investissement à Capital Variable (SICAV) fund is a type of UCITS fund. UCITS is actually a regulatory framework and SICAV is a type of fund that follows that framework.
Can U.S. Investors Buy SICAV Funds?
Yes, U.S. investors can buy SICAV funds under certain conditions. They must be a qualified purchaser, buy in a private offering if laws are met, and the fund must qualify for certain exemptions, such as the Investment Company Act exemption and the Advisers Act exemption.
What Are the 4 Types of Mutual Funds?
According to the U.S. Securities and Exchange Commission, mutual funds fall under four main categories: money market funds, bond funds, stock funds, and target date funds.2
Money market funds are low-risk funds that can only invest in high-quality, low-risk investments. These investments can be in corporations and government securities and are usually short-term. Bond funds invest in bonds and are higher risk than money market funds but usually lower risk than stock funds.2
Stock funds invest in the publicly traded shares of companies. They are at higher risk than money market and bond funds. However, there are many types of stock funds, including growth funds, index funds, and income funds. Target date funds contain a mix of investments; stocks, bonds, and other securities, and shift strategy over time, usually becoming less risky as they are intended for retirement purposes.2
The Bottom Line
A Société d'investissement à Capital Variable (SICAV) is a European open-end investment fund similar to U.S. mutual funds. Countries that commonly use SICAV funds are Luxembourg, Italy, and France. These funds are governed by either UCITs or SIM frameworks and are popular for cross-border trading in Europe.