Shares bring yields to investors, not bank deposits this year

Peníze, bankovky, česká měna, koruna, úspory - ilustrační foto.

published: 26.12.2013, 16:54 | updated: 26.12.2013 17:02:27

Prague - Investments into share funds have brought the highest yields to Czechs this year, while bond and money market funds mostly either posted losses or had only small yields, according to a poll CTK made among financial analysts.

Interest on deposits in banks and pension funds, state support not included, was often lower than inflation which will probably be around 1.4 percent this year. Investments into gold have not paid off at all, the analysts said.

"Interest rates have been falling this year, both on saving accounts and bonds. On the other hand, shares did well and, for example, US indices broke records several times," Petr Zamecnik, editor-in-chief of server, told CTK.

The improving situation of the global economy was unfavourable for gold which lost over a quarter of its value.

"Saving accounts suffer from basic interest rates and are mostly unable to cover inflation. The average appreciation moves around one percent annually and, moreover, a 15 percent tax has to be subtracted from the interest," said Broker Consulting analyst Jan Simek.

The situation of time deposits is similar even when the appreciation is a bit higher here, depending on the fixation period and the size of the deposit. Clients with deposits worth over Kc0.5m fixed for five years can expect up to a 3.2 percent annual appreciation.

Share funds will bring a yield around 9 percent this year, Simek said. However, there is a wide variety of funds with different focus. Funds focused on biotechnologies are doing the best this year, the same as in 2012.

From regions, Japan tops the list, while share funds focused on developing markets are a flop as regards yields.

Commodity funds are not doing well this year, they will cause losses around 10 percent to investors. Bond funds had an excellent period last year so returning part of the gains this year was logical. Average losses will stand at up to one percent. Losses of bond funds focused on developing markets will move around 10 percent.

Money market funds are in crowns and foreign currencies. Funds investing in crowns had yields between zero and 2 percent. The average yield of money market funds investing in foreign currencies was near zero.

Mortgage loans have attracted the highest interest of consumers this year.

"The year 2013 could be named the year of mortgage financing. Thanks to the falling interest rates, stagnating or decreasing real estate prices and comparatively favourable economic situation of Czech households, we saw the unexpected - the year 2013 will probably be a record year in the history of mortgage financing," said Josef Uchytil, mortgage specialist at company Partners.

Interest rates sank to a new record low in the middle of the year when they stood below 3 percent annually on average. At the same time, record year 2007 was surpassed as regards the volume of new mortgage loans, including the refinanced ones.


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