Czech Investors Witness Modest Gains as Mutual Funds Deliver Steady Performance in 2021

Czech investors who placed their money in mutual funds have experienced modest gains in the first half of 2021, according to the Czech Investor Index (CII750) compiled by Swiss Life Select. The index, which tracks the performance of 750 investment funds in the Czech capital market, revealed that the average Czech investor earned a respectable 5.7% from the beginning of the year until the end of June. Notably, funds rose by 2.9% in the first quarter and 2.73% in the second quarter.

Despite facing weaker results in the previous year, investors in equity funds have reaped an annual profit of 7.64% over the last three years, as per the index. Over a five-year period, encompassing significant losses at the end of 2018 and 2019, along with the drops during the Covid-19 pandemic in March 2020, the average Czech investor witnessed a yearly increase of 5.14%.

Analyzing the first half of 2021, the index identified the best-performing funds to be those with substantial weightings in American tech giants, particularly the top five tech companies: Meta, Amazon, Netflix, Google, and Apple. Additionally, consumer discretionary funds demonstrated exceptional results during this period. However, Chinese equity funds faced challenges and significantly lagged in the performance rankings.

The second quarter brought more winners into the fold, with funds from Latin America, Japan, and Central Europe showing promising performance. Furthermore, the finance sector exhibited better results in the past three months, potentially indicating a gradual decline in concerns about banking instability.

Interestingly, Czech investors have displayed confidence in mutual funds, as their investments increased by CZK 29 billion ($1.35 billion) in the first quarter of 2021. This growth brought the total value of assets held in mutual funds to CZK 780 billion ($36 billion).

Financial experts emphasize the importance of staying informed about the latest investment trends and market developments to make well-informed decisions regarding investment strategies. With the economic landscape continuously evolving, vigilant attention to portfolio management can help investors navigate the complexities and capitalize on potential opportunities.

As the year progresses, investors in the Czech Republic will closely monitor market developments and assess their investment choices to ensure their financial growth aligns with their long-term goals and risk tolerance levels.

Article by Prague Forum

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