After a difficult year of 2022 on the markets, many asset classes saw rebounding performances in 2023. While the central banks' turnaround on interest rates ensured a “return to normality” on the bond market, the focus on the equity market was primarily on technology companies. In the Funds exclusive series, the fund managers of selected funds look back on developments of the previous year and give their assessment of what the markets could expect in 2024. (Note: Prognoses are not a reliable indicator of future performance.)

"We expect a soft landing for the economy in 2024 with a high degree of probability."

Gerhard Beulig, fund manager ERSTE SELECT BOND

Fund & Performance

ERSTE SELECT BOND flexibly invests in different bond segments such as national and international government bonds, corporate bonds ("investment grade" and "high yield"), emerging market bonds in hard and local currency, as well as international mortgage bonds. The proportion of high yield bonds and other investments without an investment grade rating may not exceed 25% in total.

Note: Past performance is not a reliable indicator of future performance.

Performance since start of the fund. 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.

Commentary by fund manager Gerhard Beulig

How did the fund perform in 2023?

At the beginning of the year, the fund was performing ambitiously against the backdrop of the development of the interest rates. In the event, it corrected due to newly rising yields. Over the year, the fund achieved a plus of 5.8%.


What was the focus of the fund in 2023?

The investment focus was clearly on European corporate bonds with good and very good credit ratings. The fund achieved attractive returns with investment grade ratings and moderate maturity risk. The higher ratings are also in line with the more defensive character of the fund. We also allocated capital to government bonds in EUR and occasionally in the USA, and we also used inflation-linked bonds in this context. We complemented the portfolio with high-yield corporate bonds, which performed excellently, and with emerging markets assets, which performed well in local currencies and below average in hard currencies. At times, we would also hold larger volumes in the money market, as interest rates were still trending upwards.


What does the fund management team expect for 2024 in terms of global economy and trends?

We expect a soft landing for the economy in 2024 with a high degree of probability. The development of inflation, which we see continuing to fall, will be of crucial importance. This positive inflation trend will give central banks the opportunity to intervene by cutting interest rates to support the economy in the event of any weakness. The expected trend towards at least stable, but more likely falling key-lending rates will also provide positive input for the capital markets as a whole, but especially for the bond markets.

Note: Prognoses are not a reliable indicator of future performance.

Commodity prices will tend to fall slightly in this scenario. China will continue to implement supportive measures and thus also contribute to stabilising the global economy. Risk factors include in particular the geopolitical situation and central banks clinging to their restrictive policies for too long.


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

In anticipation of falling inflation rates, declining economic momentum, and therefore likely lower interest rates, the focus will be on longer-term corporate and government bonds. Despite the still high level, the money market will play a less relevant role, as falling bond yields will allow a corresponding price gain to be realised. Given that the emerging markets are already slightly ahead of the developed markets in the interest rate cycle, these asset classes can also assume a more prominent position again.

Note: Depending on the performance of the investment fund, the performance of an s Fonds Plan will differ from that of a single investment (higher or lower). A loss of capital is possible in both cases.


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 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 A summary of investor rights is available in German and English on the website 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.