Index: Average Czech mutual fund investor got over 7 percent return in 2021

The average Czech mutual fund investor enjoyed a return of more than 7 percent in 2021. Equity funds performed better, while bond funds lost more than 2 percent on average. This follows from the Czech Investor Index (CII750) of Swiss Life Select and Thomson Reuters.

The index monitors the performance of 750 investment funds operating on the Czech capital market. In 2020, the average yield was 5.9 percent.

“According to our index, last year’s ranking of retail funds’ success was dominated by funds focused on energy, especially oil and natural gas. They offered crown investors a performance of mostly over 30 percent,” said Richard Bechník, chief analyst at Fincentrum & Swiss Life Select, as quoted by ČTK.

This also applies to a large number of funds targeting Eastern Europe, where the energy sector is strongly represented on local stock exchanges, according to the analyst.

But it also applies to the financial sector benefiting from regional interest rate increases. In a year-on-year comparison, energy was unseated from first place by technologies that benefited mainly from the lockdown of economies due to the pandemic, Bechník added.

According to the CII750 index, funds focused on Asian equities, especially Chinese, as well as Latin America, showed the worst performance for the entire year. The funds fell to losses in excess of 20 percent.

Chinese stocks are facing an outflow of investors due to the threat of strict regulation by the Communist government. Within the Asian emerging markets, India was an exception, which faltered from severe Covid impacts, as reflected in returns.

Bond funds performed best in those portfolios that focus on emerging government bonds or high-risk bonds. Funds focused on the Czech money market and Czech government bonds found themselves in a double situation. Funds with Czech government bonds mostly lost significantly, while money market funds began to improve gradually due to rising interest rates, Bechník pointed out.

According to data from the Capital Market Association, the assets held by Czechs in mutual funds increased by CZK 84.9 billion to CZK 674.6 billion in the three quarters of 2021. In the third quarter alone, assets rose by CZH 23.5 billion.