Persistently high inflation and the restrictive course of the central banks continued to dominate the first half of the year. In this series, Funds exclusive, our fund managers look back on the performance of selected funds and explain their view with regard to the second half of the year.

"The fund significantly outperformed the overall market during the period under review and benefited in particular from the performance of equities in the "labour" segment." 

Bernhard Selinger, fund manager ERSTE FAIR INVEST

Fund & Performance

The ERSTE FAIR INVEST invests worldwide primarily in companies which are identified by the management company through a predefined selection process to have a particularly high social utility. The titles are selected with a focus on companies which, through their actions, have a positive impact in the areas of health & well-being, work and society. Furthermore, the investment process is based on fundamental business analysis. 

The performance is calculated in accordance with the OeKB method. The management fee as well as any performance-related remuneration is already included. The issue premium which might be applicable on purchase and as well as any individual transaction specific costs or ongoing costs that reduce earnings (e.g. account- and deposit fees) have not been taken into account in this presentation. Past performance is not a reliable indicator of the future performance of a fund.

Performance since start of the fund
Note: Past performance is not a reliable indicator for future performance. Due to the very short term, this presentation of the performance is not very meaningful.

Commentary by fund manager Bernhard Selinger

  • Hopes for an end to interest rate hikes a key driver on the markets
  • ERSTE FAIR INVEST outperformed the overall market by a significant degree
  • Fund benefited particularly from shares in the "labour" segment

 

What are your conclusions from the first half of 2023?

In the first half of 2023, the global equity markets delivered a rather positive performance. The main drivers were declines in inflation rates in Europe and the USA and, as a result, hopes of a foreseeable end to the current cycle of interest rate increases.

ERSTE FAIR INVEST significantly outperformed the overall market during the period under review. The fund benefited in particular from the performance of equities in the labour segment. Recently, the positions in Nvidia and Alphabet, among others, was reduced in the course of profit-taking.

What do you expect for the second half in terms of the themes of the fund: healthcare & well-being, labour, and society?

  • Segment: healthcare & well-being

The broad availability of affordable food plays a key role in view of rising global population figures (according to the United Nations, the eight-billion-person mark will be exceeded on 15 November 2022). In ERSTE FAIR INVEST, we are invested in the world's largest agricultural machinery manufacturer John Deere, which is one of the pioneers in the field of smart farming. Smart farming machines are significantly more efficient and precise, resulting in higher yields while using less seed, fertiliser, and water.

Another topic is the supply of affordable drugs, which is of utmost importance especially for emerging countries and comes with a direct social impact. We should like to mention the US pharmaceutical company Gilead Sciences in this context which we hold in the fund. The company focuses strongly on research into diseases that particularly affect developing countries (e.g. AIDS, hepatitis). Gilead Sciences often provides drugs in emerging countries at cost and also ensures long-term supply through local partnerships.

  • Segment: labour

More and more companies are becoming aware that satisfied employees who can identify with the company and its values are the key to long-term corporate success. This is particularly true for industries with skilled workers. The notion of a “war for talent” has become increasingly relevant.

ERSTE FAIR INVEST is invested in SAP, a leading corporate software group in the areas of accounting and human resources. As a high-tech company, SAP is especially dependent on qualified employees – with a strong focus on employee development and retention. The German company has received several awards for its corporate culture in the areas of diversity and inclusion.

  • Segment: society

The society segment focuses on issues related to education, inclusion, and social infrastructure (e.g. public transport). According to studies, affordable access to mobility can significantly reduce social inequality in cities, from which especially children, older people, and socially marginalised groups benefit.

A company worth singling out from the fund in this context is probably the French Alstom, one of the world's leading suppliers of rail vehicles and infrastructure for long-distance and local transport. Since its establishment, the Alstom Foundation has supported about 270 social projects across more than 60 countries. Affordable public transport as social infrastructure help.

 

Note: The companies listed here have been selected as examples and do not constitute investment recommendations. Any portfolio positions of funds disclosed in this document are based on market developments at the time of going to press. In the context of active management, the portfolio positions mentioned may change at any time.

ERSTE FAIR INVEST

Important legal note:

Prognoses are not a reliable indicator for future performance.

Disclaimer

This document is an advertisement. Please refer to the prospectus of the UCITS or to the Information for Investors pursuant to Art 21 AIFMG of the alternative investment fund and the Key Information Document before making any final investment decisions. Unless indicated otherwise, source: Erste Asset Management GmbH. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to Art  21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to Art  21 AIFMG, and the Key Information Document can be viewed in their latest versions at the website www.erste-am.com within the section mandatory publications  or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the website www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to Art 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.