How did the fund perform in 2023?

The fund’s performance was rather volatile in 2023. The year got off to a very good start, followed by the banking crisis in the US, a recovery over the summer and then the impact of rising yields on the bond markets. However, the recovery followed suit, resulting in a solid plus for the full year 2023.

What was the focus of the fund in 2023?

The focus was on investments in the global equity markets, corporate and government bonds from developed markets as well as emerging markets. Within the equities section, we made allocations using regionally and globally investing funds. The USA was the dominant investment region. We reduced positions in the US bond markets over the course of the year in favour of Europe. We also invested in money-market-adjacent instruments for large parts of the year, as the continued rise in yields also made the money market a profitable asset class.

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

We envisage 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 great importance. This positive inflation trend will give central banks the opportunity to intervene by cutting interest rates in an effort 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 momentum 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 be experiencing slight weakness 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 yields, money market investments are unlikely to play a major role, although the level is certainly elevated. Any gains from falling yields on longer-term bonds appear to be more interesting here.

As the interest rate cycle in the emerging markets seems to have advanced farther, we will retain our focus in this area as well. The absolute yield level is also interesting for high-yield corporate bonds. We continue to actively manage the equity allocation, which will generally be at the upper end of the bandwidth given our moderately positive outlook. Within the equity allocation, we might step up emerging markets and/or growth companies in the event of falling yields.

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