Investing through collective investment funds will allow you to participate in the financial performance of corporations (shares and balanced funds) and increase the yield on your money beyond the earnings offered by savings accounts or traditional term deposits. We offer mutual funds of renowned European investment firms.
Mutual funds offered by LBBW Bank CZ a.s.
- Customers who prefer investing through collective investment funds can take advantage of mutual funds of renowned European investment companies offered at our branches. An investment into mutual funds allows partaking in the financial performance of corporations (shares and balanced funds) or earning higher interest that surpasses the yield on similar bank products (money market and bond funds).
- Mutual funds are denominated in CZK and the following foreign currencies: EUR, USD, CHF, and JPY.
- We also provide investment and information services, including recommendations for investment strategies based on the requirements of customers who sign a consulting contract.
- We offer the following types of funds: money market funds, bond funds, mixed funds, shares funds, and hedge funds.
How to choose a fund?
Prior to selecting a specific fund, you should review your financial situation, your attitude to risk, and the purpose of your investment. Our banking manager will subsequently discuss your financial needs and objectives. LBBW specialists have many years of experience with the comprehensive handling of the financial needs of customers, and they will help you reach your objectives.
The quality of a fund does not depend on how much money the fund has made in the past, but on its long-term comparison with the competition. It is important to realize that the past performance of a fund does not guarantee that the fund will be equally as successful in the future. Investments are not insured, and there is no guarantee for the return of money you invest or an increase in its value.
Risk versus expected return on investment
Specifying the risk an investor is willing to accept is the basic criterion for determining an investment strategy. The risk also determines the expected return on investment.
| Fund type | Risk | Minimum investment period | Rate | Potential long-term yield |
|---|---|---|---|---|
| Money market funds | minimal | 6 months to 2 years | stable | low |
| Bond funds | low to medium | 2 to 4 years | slightly fluctuating | low to medium |
| Mixed funds | medium to high | 3 to 5 years | fluctuating | medium to high |
| Shares funds | high | more than 5 years | highly fluctuating | high |
| Hedged funds | low | more than 2 years | depending on fund type | low to medium |
Note: The previous performance of a fund does not guarantee the same performance in the future. The value of an investment and its yield may grow and decline, and the return of the originally invested sum is not guaranteed. We recommend to clients to become closely familiar with individual products and to stay away from closing transactions, where they do not fully understand the conditions and the potential risks involved.
Advantages of investing into mutual funds:
Diversification (spreading investments)
Since the portfolio of a mutual fund can include hundreds of securities from various issuers and other financial instruments, mutual funds have the desired level of diversification that could be attained individually only by wealthy investors.
Professional management
Your investments are managed by an investment professional.
Liquidity
The investor, i.e. the client, can sell his share in a fund at any time. A fund must buy an investor's share for the net asset value (NAV).
Simplicity and availability
Based on an investor's request, shares can be exchanged for shares of another fund. Investors can monitor the value of their shares using various information channels.
Extended investment opportunities
Thanks to collective investing, even small investors can benefit from the financial performance of large international corporations. Investments into funds start at CZK 5,000.
Tax benefits
If the period from purchasing and selling securities of a collective investment fund exceeds six months, the applicable earnings are exempt from personal income tax. Most funds are registered in various tax havens, and dividends payable are taxed in accordance with the applicable agreement preventing double taxation between the Czech Republic and the relevant country.
