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Low-risk investing – the latest issue of the FMA’s “Let’s talk about money” series

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Anyone managing money or assets in the capacity as a child’s guardian or as an adult appointed to represent someone, is obliged to do so in a way that is low-risk. This means, that while any investment should be “as fruitful as possible”, above all it should be invested securely. Investments that are branded as “mündelsicher” (low-risk or “gilt-edged” depending on the context) promise a very high degree of security, and therefore also enjoy popularity among cautious investors with long-term investment horizons. The current edition of the FMA publication “Let’s talk about money” explains the facts about low-risk / gilt-edged investing” in easy to understand language in a compact two page format.

“Security over yield” investment strategy

The Austrian legislator is particularly restrictive over what are regarded as low-risk investments, with the General Civil Code (ABGB; Allgemeines Bürgerliches Gesetzbuch) only recognising a very small number of investment forms with a particularly low risk of default, such as savings deposits, credit balances held at banks, Austria government debt securities and bonds that are guaranteed by the state (“gilt-edged investments”). Properties is Austria are considered low-risk per se. Other forms of investment of “money held in trust” require prior approval by the competent court. The Investment Funds Act 2011 (InvFG 2011; Investmentfondsgesetz 2011) and the Real Estate Investment Funds Act (ImmoInvFG; Immobilienfondsgesetz) define special rules for funds that oriented on the provisions in ABGB, so they they are considered suitable for investing money held in trust. Their fund rules, which determine in which investment instruments they exclusive invest in for money held in trust, are required to be approved by the FMA . The FMA publishes a continually updated list of such investment funds and real estate funds that are considered as suitably low-risk on its website. Currently 14 investment funds and two real estate funds fulfil the legal criteria. 

The term “mündelsicher” regardless of whether it means “low-risk” or “gilt-edged” does not mean that such an investment is completely risk-free: such instruments are also subject to market-related price volatility, can also fall in terms of real value due to inflation, and the eventuality of a dead loss cannot be excluded completely.

This edition of the FMA publication “Let’s talk about money” can be found at:

Journalists may address further enquiries to:

Klaus Grubelnik (FMA Media Spokesperson)

+43 0 676 88249516

+43 (0)1 249 59 – 6006

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