Top Ways Czechs Can Prepare for Retirement With Long-Term Investment Products – Find Out More!

With the beginning of January, Czechs have the opportunity to prepare for their old age under more favorable conditions. Long-term investment returns represents one of the ways to achieve this goal. Let’s take a look at the most common products Czech stores in DIP.

A total of 29 companies offer the new financial instrument in the Czech Republic. Amundi, Europe’s largest asset manager, recently launched a DIP. It offers hundreds of investment instruments to users, including actively managed funds, index funds and low cost.

“The long-term investment product is a welcome change that allows savers to effectively prepare for their old age, and therefore complements our portfolio of financial and investment products,” says Roman Pospíšil, Deputy Chairman of the Board of Directors of Amundi, Czech Republic.

Patria Finance, the largest domestic securities dealer, also offers investments through DIP for new and existing clients. The head of the investment portal Patria.cz, Josef Němeček, says that clients usually reach for exchange-traded funds (ETF) within a Regular Investment product. In particular, it applies to the S&P 500 and Nasdaq stock indexes and the broader MSCI world index.

Among the favorites, we can also find ETFs that focus on one of the main trends of today, ie robotics and artificial intelligence, on the front row. “As part of regular investments, we now offer 14 of the most popular ETFs, but soon we will expand the range significantly,” Němeček says.

On the other hand, Česká spořitelna sees little interest in buying ETFs and individual shares within the DIP among its clients, as stated by Ladislav Šlápota from department Česká spořitelna Wealth Management for SZ Byznys.

“After a few months since its launch, we can see that DIP has caught the attention of clients as a suitable development for creating a financial reserve for old age. In general, we see that Spořitelna clients prefer regular investment in one specific product. Mixed funds are the most popular,” says Šlápota.

Another major fund manager, Generali Investments CEE, also offers a long-term investment product. Until now, clients mostly choose dynamic funds with a long-term investment perspective and regular investments.

“In particular, it is mainly the Generali Global Brands Fund, in which a large part of the investments within the DIP go. After that, clients’ preferences are followed by, for example, medicine and biotechnology Generali Fond, Generali Corporate Bond Fund or Generali Real Estate Fund,” Generali Investments CEE finance director Marek Beneš said for SZ Byznys.

According to him, it is obvious that DIP leads to invest even those who had no – at least in the case of this asset manager – direct experience with investment funds. “Nearly half of the clients who currently have Generali DIP are completely new clients for us,” said Beneš.

According to the financial advisory firm Broker Consulting, ETF instruments are generally more in demand among their clients compared to actively managed funds.

“According to our experience, we can say that the most used are investment portfolios of funds and ETF instruments that are put together individually. The most common composition is 60 percent shares, 30 percent bonds, and ten percent other options,” Ondřej Frýda, regional manager of Broker Consulting, explains to SZ Byznys.

According to Frýda, however, people should definitely not “describe” each other “Investment strategy is always based on investment horizon, risk aversion, overall financial situation and investment experience. With each client, we create a financial plan that takes into account the client’s investment questionnaire, investment experience, current portfolio and goals,” he said.

Many Czechs also invest through the popular investment platform Porto. Clients here usually choose portfolios made within the DIP framework, which are made up of ETFs tracking broad indices from around the world and thus diversified on worldwide.

“According to research and our experience, this approach is the best for long-term, consistent investing – perhaps just for retirement, in terms of the ratio of return to risk. In addition to the portfolios made by Porta, the product of a standard strategy is also very popular, where investors make up the investment mix themselves. About a quarter of our customers choose this route,” Martin Luňáček, Port’s product director, told SZ Byznys.

According to Luňáček, investing in cryptocurrencies through ETP, which is an investment instrument traded on the stock exchange similar to ETF, has also become popular within the DIP. They can also be included in the DIP on the port.

“Only the cryptocurrency instrument bitcoin is the fifth most popular one that investors include in their investment strategies. Previously, there were only ETFs for well-known indexes such as the American S&P 500, in which investors have the largest number of assets. But people also have a lot of faith in the sectors of clean energy, robotics and cyber security,” said Luňáček.

The analyst Marcel Vanduch from Partners claims that in the case of this financial advisory company, the DIP solution is mostly part of the wider investment portfolio of individual clients. “We are registering more interest among today’s generation of thirty-twos, and these are usually stock solutions that have the most interesting income potential over a very long investment horizon, ” said Vanduch for SZ Byznys.

According to the analysis, the formation of the overall investment portfolio is largely not only about DIP, but if the long-term portfolio should be built only with the view of ensuring old peaceful financial age, the biggest part would be equity funds. targeting shares of large global companies from developed markets.

“A smaller part would then include funds focused on investments in emerging market shares, then shares of smaller companies in terms of market capitalization, and some funds could sector such as healthcare or technology would be an appropriate addition,” he said. Vanduch.