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.

"We expect a continued positive trend on the bond markets in an environment of further – maybe more slowly – falling inflation and no more surprising interest rate hikes."

Gerhard Beulig, fund manager ERSTE FIXED INCOME PLUS

Fund & Performance

The ERSTE FIXED INCOME PLUS invests primarily in subfunds with a focus on bonds and money market instruments, whereby absolute return subfunds can also be used. The fund invests flexibly in different bond segments such as national and international government and corporate bonds, inflation-protected bonds, high-yield bonds, emerging market bonds and mortgage bonds. 

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 Gerhard Beulig

  • Focus on high-yield corporate bonds and emerging markets
  • Continued positive trend expected in bond markets

 

How did the fund perform in the first half of 2023??

The fund got off to a good start in the first weeks of the year, but then incurred a correction and subsequently moved sideways amid relatively high levels of volatility. Almost all asset classes across the bond segment achieved positive returns. Investors expect declining inflation rates and thus an end to the cycle of interest rate hikes in the foreseeable future.

Even amid stable yields, the higher yield level helps to generate current income. High-yield corporate bonds delivered the highest returns, followed by emerging market bonds in local currency, convertible bonds, corporate bonds with very good credit ratings, and emerging markets bonds in hard currency. Absolute-return funds were only slightly positive.

What was the focus of the fund in the first half?

We focused on high-yield corporate bonds, funds that themselves pursued an absolute-return strategy, and emerging markets. We also invested in corporate bonds with very good credit ratings, convertible bonds and, for reasons of diversification, government bonds.

We generally invested only very limited funds in the money market in order to participate in the positive trend on the bond markets.

What do you expect for the second half in terms of global economy and trends?

We expect the positive trend on the bond markets to continue in an environment of further (perhaps more slowly) falling inflation rates and no more surprising interest rate hikes. The generally higher yields will facilitate a clearly positive current yield. Default rates on corporate bonds should remain at a manageable level. We do not envisage a sharp and prolonged recession.

What are your priorities in the fund, based on your expectations?

We remain almost fully invested and generally prefer corporate bonds, especially in the high-yield segment, emerging markets and, mixed in, convertible bonds within the fund-specific investment limits of rating and asset classes.

ERSTE FIXED INCOME PLUS

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.