Czechs Increasingly Invest in Mutual Funds

The wealth of Czechs invested in mutual funds has seen a significant increase in 2023. According to representatives of the Association for the Capital Market (AKAT), the volume of assets stored in these funds swelled by 187.1 billion to 938.6 billion crowns. This represents a substantial increase compared to the previous year when the value of assets in the funds increased by 44 billion to reach 751.5 billion Kč.

“This was the most successful year in history,” said Jana Brodani, the association’s executive director. Over the past decade, the wealth in collective investment funds has more than tripled, from 307 billion Kč in 2012. She also noted that by the end of September last year, Czechs had 5.44 trillion Kč in banks, 589.8 billion Kč in pension insurance, 311.5 billion Kč in building savings, and 90 billion crowns in life insurance.

Mutual fund investments grew due to market appreciation and the influx of new investments. According to the weighted average, bond funds earned eight percent last year, mixed funds 11 percent, equity funds 17 percent, structured funds nine percent, retail real estate funds four percent, and money market funds six percent.

Martin Řezáč, the director and chairman of AKAT, expects a gradual decrease in yields in money market funds this year due to the easing of monetary policy. In the case of bond funds, he sees a slightly lower yield potential but an “exciting” real yield. The value of equity funds will benefit from the easing of monetary policy and the fall in inflation, but political risk related to military conflicts and elections poses a challenge.

By the end of 2023, the most money was in bond funds, amounting to 350.8 billion Kč. They were followed by mixed funds, with 264.2 billion Kč, equity funds, with 216.2 billion Kč, and real estate funds, with 68 billion crowns. Bond funds recorded the most significant increase in assets, up by 116.1 billion Kč.