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

Gerhard Beulig, fund manager YOU INVEST GREEN solid

Fund & Performance

YOU INVEST GREEN solid offers investors a dynamic mix of different asset classes. Within the YOU INVEST product family for private customers, it is the fund with the lowest risk appetite and suitable for long-term capital accumulation. In return, a correspondingly lower increase in value is expected. The focus is on price stability. The portfolio is continuously monitored by our experts and regularly optimized in line with current market opportunities. The fund management is managed within a comprehensible and structured investment process.
The fund invests up to 10% in equities or equity funds and up to 100% in bonds or bond funds.

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?

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?

Our investment focus was clearly on bonds, specifically corporate bonds in the investment grade segment and government bonds from the Eurozone. For a short while, we were also holding a significant contingent in the US bond segment as well as a noticeable allocation of high-yield bonds and emerging markets. The equity component usually accounted for around 7% to 8.5%. We implemented our investment strategy via sustainable investment funds.

Note: In the context of active management, the portfolio positions mentioned may change at any time.

 

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.

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.