European wealth management firm Novofina will launch in the UK this year bringing “state-of-the-art” algorithms which it claims can deliver 20 per cent returns.
Novofina 7plus and Novofina 20plus are the first products to be launched in the UK and the company said that based on past simulations they aim to offer average annual net returns of 7 per cent and 20 per cent respectively.
The two portfolios have achieved back-tested yearly net returns - over an average of 10 years - of 7.34 per cent and 20.07 per cent.
The company’s founder, Harald Helnwein, said: “The focus of Novofina is on the client’s position.
“We are not a high frequency hedge fund, but we aim to enter positions in an efficient way, resulting in better prices for our clients.
“Our low execution fees also play a big part in making a difference to significantly improve the client’s overall performance.
“We are not focused on maximising short-term profit; we are focused on managing risk.”
The company said its two portfolios have no management fees, no subscription fees and no performance fees and there is a minimum deposit recommendation of £30,000.
It has said all commissions are already priced into expected returns and its execution fee is $0.015 (£0.012) a share.
Novofina said it uses “unique, state-of-the-art algorithms, of a quality previously only available to the super-rich with access to private banks”.
It said it already trades the equivalent of several million pounds every day “flawlessly, precisely and fully-automated”.
Mr Helnwein said the concept behind his company was called Neue Finanzen, a German phrase meaning "new finances".
He said: “People are fed up with the banks, after bailing them out in the financial crisis, and fed up that their savings are barely earning them anything.
“They don’t like the old financial systems, with advisers tending to be more interested in their own commission than their clients’ interests.
“Private investors are looking for new alternatives; Neue Finanzen addresses their concerns.
“It’s a fair and open solution in which the customer stays in control of their own money, with access to sophisticated algorithms to optimise their position, complete transparency over trading and the freedom to leave at any time.”
Phil Stevenson, a financial adviser with Cheshire-based Ark Financial Planning, said: "There is nowhere you can get those level of returns. If it was that easy it would have been done."
