The founder of a robo-adviser claiming it can use algorithms to deliver 20 per cent returns has responded to criticism.
Harald Helnwein, the founder of European wealth management firm Novofina, said he was not guaranteeing these returns but claimed his approach could deliver them.
He said: “What we have described is what we think we will be able to deliver. We cannot guarantee anything but we have just been doing it for quite a while and we know what the outcome can be with trading stocks.
“It is quite interesting to see that a lot of people hear an opinion about what you can and cannot achieve but that impression is based on what someone thinks about the market and what they are capable of achieving themselves.
“We are pretty positive we can achieve that.”
Mr Helnwein said his firm would only trade in stocks on the S&P500 but said Novofina’s difference would come in how it bought and sold them.
He said: “When you buy and when you sell is important but nowadays it is important how you buy and how you sell.
“You really have to be perfect in order execution, otherwise you can lose 5 per cent just by placing market orders.”
He disputed that getting high returns meant going up the risk scale, saying he was not a “big fan” of investing in foreign exchange markets and contracts for difference.
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.
But advisers have questioned the level of returns Mr Helnwein claims he can achieve, with Phil Stevenson of Ark Financial Planning saying there was “nowhere” you could get returns of that level.
damian.fantato@ft.com
