While the stock markets climbed to new record highs in the first half of the year, the first central banks also initiated a turnaround in monetary policy by cutting interest rates. Will the environment remain positive?

In the Funds exclusive series, the fund managers of selected funds look back on developments in the first half of 2024 and give their assessment of what the markets could expect in 2024. (Note: Prognoses are not a reliable indicator of future performance).

"Geopolitics continues to play an important role. The Ukraine-Russia war, relations between the USA, Taiwan, and China, and the escalation in the Middle East were key issues."

Gabriela Tinti, fund manager ERSTE STOCK EM GLOBAL

Fund & Performance

The ERSTE STOCK EM GLOBAL invests primarily in companies based or doing business in global emerging markets. The fund's investment process is based on fundamental business analysis. When selecting stocks, the focus is on high-quality, high-growth companies. A hedge against foreign currency risks is generally not provided, but is possible.

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 Gabriela Tinti

How would you sum up the first half of the year?

The global equity markets have shown a pleasingly positive performance in the year to date. Falling inflation rates in Europe and the USA, better-than-expected growth in the US economy, global company earnings, and technological advances in artificial intelligence turned out to be drivers on the capital markets worldwide.

The emerging markets have also posted significant gains in 2024 to date. Geopolitics continues to play an important role. The Ukraine-Russia war, relations between the USA, Taiwan, and China, and the escalation in the Middle East were key issues. The hegemonic rivalry between the USA and China has triggered broader security concerns in Asia and heightened concerns about the stability of the status quo in Taiwan and the global semiconductor value chain. More and more companies are taking supply chain diversification seriously.

Companies are increasingly emphasising the benefits of “friend-shoring” their supply chains to better equip themselves against these political challenges. India, Mexico, Taiwan, and South Korea are best positioned for this transition and have seen significant gains in 2024.  While the slowing momentum of the economic recovery in China weighed on the equity markets in 2023, the Chinese indices have been upbeat since February. That being said, weak investment and consumer confidence as well as the ailing real estate market continue to weigh on China's recovery after the reopening.

The performance of the regions was very mixed and in opposition what we had seen in 2023. Whereas Latin America made a strongly negative contribution to performance, Asia and EMEA (Europe, Middle East and Africa) developed favourably. Taiwan and China were the main contributors to the strong performance in Asia, whereas Thailand and Indonesia contributed negatively. Technology, consumer goods, and infrastructure were the attractive positions here. In Latin America – most notably Chile and Argentina – financial companies generated high gains.

Note: Please note that an investment in securities entails risks in addition to the opportunities described.


How did ERSTE STOCK EM GLOBAL perform in the first half of 2024?

In this environment, ERSTE STOCK EM GLOBAL recorded a positive performance of 12.6%. The fund continued to invest in high-quality growth shares. Equities from the technology sector continue to form the largest component of the fund, with a particularly strong weighting in the chip sector (Taiwan Semiconductor and Samsung Electronics).

From a regional perspective, we began to build up more exposure to China and Taiwan in the first half of the year, as we regard the medium-term growth prospects as positive in the context of attractive valuations, and we believe they should benefit from global megatrends. In China and Taiwan, we made investments in companies that benefit from the megatrends 5G, data/cloud, electric cars, computer games, and artificial intelligence. Companies in renewable energy (especially in China) also stabilised and were able to generate profits again.  Increased allocations were made to Taiwan Semiconductor, Samsung Electronics, Lenovo, and SK Hynix Inc.

Note: The companies listed here have been selected as examples and do not constitute an investment recommendation.  The portfolio positions listed may change at any time as part of active management. There is no guarantee that securities will be permanently included in the portfolio.


What are your expectations for the second half of the year?

The consensus among analysts continues to expect the global economy to recover in 2024, but with growing regional differences. A positive factor for the emerging markets is the fact that the growth differential between the emerging markets and the industrialised nations will widen again. In addition, the positive outlook for rising company earnings in the emerging markets supports this growth trend.

Corporate profits in the emerging markets are expected to rise by 20.8% in 2024 and 15.4% in 2025. Growth expectations are positive for all regions, with the highest growth figures estimated for the EM Asia region at 26.8% for 2024 and 16.9% for 2025. Economic growth is also expected to be strongest in the EM Asia region. The IMF China expects GDP growth of over 4.8% for China in 2024.

Our base-case scenario for 2024:

  • As for China's growth drivers, we expect consumption to normalise, supported by income growth and the decline in the savings rate to 29-30%. Restoring confidence and removing policy distortions are important to maximise sustainable growth and will bring back interest (inflows) from foreign investors. Measures are being taken on an ongoing basis to stabilise the real estate sector.
  • India, one of the world's most attractive consumer markets with favourable socio-economic and demographic growth drivers, remains interesting despite high valuations.
  • Technology companies (Korea and Taiwan) and consumer shares could benefit this year from the growing middle class in emerging markets and from further digitalisation and artificial intelligence.
  • India and Mexico are increasingly benefiting from local supply chains.
  • Energy and commodity companies remain in focus.
  • Industrial companies will benefit from increased infrastructure spending and the expansion of renewable energies and technologies.
  • 2024 will be the year of elections. More than 70 countries with a population of around 4.2 billion will be holding elections. (Taiwan, Indonesia, Mexico, and South Korea have already had theirs in 2024).
  • We also continue to see the Latin America region as an attractive supplier of raw materials. Mexico will once again become more attractive as an “extended workbench” for the USA and due to friend-shoring. For Mexico, we expect a potential net gain of around 30% in exports to the USA over a five-year period.

Note: Prognoses are not reliable indicator of future performance.


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.