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Finax beats mutual funds and their performance

Finax Intelligent Investing beats the vast majority of its competitors. Take a look at how Finax outperforms the best-selling mutual funds in Slovakia.

Radoslav Kasík | Our results | 1. April 2018

  • Revenue of Finax portfolios is by 4% higher than the revenue of comparable competitors.
  • Finax even outperformed the market itself. Our portfolios achieved over the past 30 years annually up to 1.16% higher yields.

  • How can we show the past performance of the Finax portfolios when it was established only in 2018?

When creating Finax, Juraj and I made an in-depth market survey about financial and investment products for ordinary people. The ratio between the products´ performance and their prices was literally tragic. We had no illusions about the Slovak investment market, but the reality surprised us.

We realize that Slovaks have little experience with investing and often lack willingness to invest. We mostly attribute this fact to the poor quality of offered products. Therefore, when we were establishing Finax, we took on the challenge to bring a high quality product to the Slovak market.

When creating our product, we wanted it not only to be profitable, but also simple and attractive to use. Only then can it be truly client-oriented.

In my opinion, we have fully achieved this goal. Nowdays, you can hardly find a comparably profitable product for masses in Slovakia.

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The claim that we offer higher returns is supported by historical data

Mutual fund yields are based on information published by the managers on their websites. Mutual fund returns are net, i.e. after tax (tax rate 19%). Finax's portfolios are tax-free.

Note: All data relating to the historical development of the Finax portfolios is modelled and based on data back modelling. We described how to model historical performance in How do we model historical portfolio development. Past results are not a guarantee of future returns and your investment may result in a loss.

Efficiency comparison (p.a.) of Finax portfolios with best-selling mutual funds in Slovakia, reported after tax per 31.12.2017:

In the case of equity funds, performance of the Finax's 100% equity portfolio is higher by more than 4% compared to the average performance of the above-mentioned mutual funds over the past 3, 5 and 10 years. Mixed asset mutual funds score similarly when compared to the Finax portfolio of 50% equities and 50% fixed income.

Efficiency comparison (p.a.) of Finax portfolios with best-selling mutual funds in Slovakia, reported after tax per 31.12.2017:

Few exceptions to the better performance of Finax portfolios can be found among conservative portfolios consisting majorly of bonds. The reason behind this is the considerably lower risk level of ETF funds found in Finax Intelligent Investing. Those are oriented globally and on more solid bonds, i.e. they are based on bonds with lower risk and safer revenues.

On the other hand, majority of the compared mutual funds of our competitors focuses on bond emissions of the Central European region. Such securities are often privately-traded bonds that offer higher returns than the world average, but they have lower liquidity and pose higher risk in the eyes of investors.

Efficiency comparison (p.a.) of Finax portfolios with best-selling mutual funds in Slovakia, reported after tax per 31.12.2017:

Finax's revenues surpass even the market itself

The aim of Finax´s portfolios is to copy the composition of global markets. For example, if the total value of US stock markets today accounts for more than half of the global stock value, it has a similar weight in the stock part of our portfolios (53.5%).

Interestingly, performance of our portfolios beats even the market itself. When comparing the performance, I point out that our performance is net of fees, which means that our single fee is already included.

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Correspondingly, we compared the revenues of Finax 100% stocks and 0% bonds portfolio with the MSCI World Index, which is the best-known and most widely used stock index aimed at reflecting the development of the global equity markets.

Here you can find the reason why our performance beats the market and what are the main reasons for higher returns of Finax Intelligent Investing in comparison with mutual funds.

Finax was only established in 2018. How can we illustrate performance for the past 10 years?! 

When we provide performance information of Finax´s portfolios, there may be objections regarding the figures, since we launched the Finax´s Intelligent Investing only in 2018 and we do not have a 10-year history.

However, in the case of Finax, this is not a problem. We did not invent our own investment strategy. Our product simply copies the market by investing in ETF funds. The stock and bond markets have more than a century-long history.

ETFs are baskets of securities that trade on an exchange. They were not created by Finax. They are managed by the world's largest money managers. They invest in portfolios of equities or bonds with the same composition as world indexes.

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Our portfolios do not consist of our own funds. The funds that make up our portfolios have been around significantly longer than Finax.

Performance of funds that are younger than 10 years is modelled based on the indexes that they copy. Therefore, it is not a problem to determine the yields of our portfolios based on their composition.

In order to be as accurate as possible, historical portfolio development has been adjusted to reflect our fees. Furthermore, it has also been adjusted for rebalancing and tracking difference.

Tracking difference is the deviation of the fund's performance from the performance of the underlying index which the fund replicates. It can be positive or negative. It is expressed as a difference in percentage performance. If, for example, the S&P 500 index grew by 78% in 5 years and the ETF which replicates it increased by 80%, the ETF tracking difference is + 2% over 5 years.

All investment assets included in the Finax Intelligent Portfolios have been in the world long before Finax itself came into being. We have not invented anything new. Therefore, it is not a problem for us to show how the selected assets performed before the establishment of the Finax´s Intelligent Investing portfolios.

Finax brought these investment opportunities, which are popular and well-established in the western markets, to Central European investors. We enable you to finally capitalize on your savings and assets - simply, cheaply and profitably.

Radoslav Kasík
Radoslav Kasík
Chief Investment Officer
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