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 low unemployment rate and the stable development of company earnings would tend to suggest a resilient economic environment."

Philip Schifferegger, fund manager ERSTE REAL ASSETS

Fund & Performance

ERSTE REAL ASSETS mainly invests in equities, commodities and precious metals, real estate, infrastructure and inflation-linked bonds with focus on real values. Investments take place directly or indirectly through investment funds or derivatives.

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.

Kommentar von Fondsmanager Philip Schifferegger

  • Focus of attention is currently on the economy
  • Market environment with pronounced fluctuation expected to continue
  • Positive factors should outweigh the negative ones for the asset classes of ERSTE REAL ASSETS

 

How did the market environment fare in the first half of 2023?

After the heavy losses in 2022, the capital markets started to recover  in the first half of 2023. However, the course of the recovery was relatively volatile and heterogeneous. Noticeably lower inflation and the prospect of an end to interest rate hikes in the USA in the near future boosted both equities and bonds across the board. In the equity segment, growth and value shares recorded significantly diverging performances. The former benefited from the euphoria surrounding the topic of Artificial Intelligence, whereas the latter came under significant pressure at times due to falling energy prices and the turbulence in the US banking sector.

Due to falling energy and industrial metal prices, the commodities also delivered a negative performance. Gold, on the other hand, performed brilliantly. The precious metal benefited primarily from the foreseeable end of the interest rate hike cycle in the USA and the weaker US dollar. Open-ended real estate funds showed a stable performance independent of the market environment.

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

In the first half of 2023, the ERSTE REAL ASSETS fund’s asset allocation remained stable at 50% equities (strategically balanced in growth and value), 30% gold, and 10% commodity products.

We did adjust the real estate segment though, further reducing the portion of open-ended real estate funds and investing the freed-up capital in global real estate and infrastructure equities. In the year to date, ERSTE REAL ASSETS has gained 6.3% (as of 4 July 2023).

What are your expectations and your outlook for the second half?

The focus of attention is currently on the economy. The US Federal Reserve has paused its interest rate hikes for the time being in order to monitor the economic development from here on out. The low unemployment rate and the stable development of company earnings would tend to suggest a resilient economic environment.

However, we cannot rule out a recession. The extent and timing are of course unknown, but in principle one can state that the later an economic downturn comes, the better it is for the markets. Because, the more time that passes with inflation approaching the target value of 2%, the faster and the more strongly the central bank can react and lower interest rates again.

In this setting, we continue to expect a market environment with pronounced volatility for the second half of 2023, but are confident that the positive influencing factors will outweigh the negative ones for the asset classes of ERSTE REAL ASSETS.

ERSTE REAL ASSETS

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.