Discussions regarding customs tariffs and geopolitical tensions were the main focus in the first six months of the year on the financial markets. Where are the markets headed in the second half of 2025?

In our Funds check series, fund managers from selected funds look back on the past year's performance and give their assessment of what we can expect for the rest of the year. (Please note that forecasts are no reliable indicator of future performance and that investing in securities involves risks as well as opportunities.)

Summary

  • Review: the bond portion contributed positively to the fund’s performance, whereas the equity portion ended up contributing negatively due to the high volatility on the equity market.
  • Current allocation: equity portion slightly below 50%; bond portion focused on green, social, and impact bonds from the high rating segment
  • Outlook: we continue to expect political uncertainty and, as a result, higher volatility on the capital markets. However, we are confident that the positive measures (deregulation, tax cuts, investment programmes in Europe) will be able to offset the negative effects of higher tariffs. Interest rate cuts in the US and a further rate cut in the Eurozone could provide tailwinds this year.

Fund manager Gerhard Beulig
(c) Samuel Kreuz

Fund & Performance

ERSTE GREEN INVEST MIX offers investors a balanced mix of stocks and bonds. Assets, which are classified as sustainable by the management company based on a predefined selection process, are acquired directly as well as indirectly. In the equities section, the fund invests worldwide primarily in companies that make a positive contribution to ecological megatrends. In the bond section, so-called green bonds are acquired, which are issued to finance sustainable projects.

Note: Please note that an investment in securities entails risks in addition to the opportunities described. Past performance is not a reliable indicator of future performance.

Performance since start of the fund (13.10.2020). 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 the first half of 2025?

The fund achieved a slight gain of around 1% (as of 2 July 2025). The equity portion, which corresponds to that of ERSTE GREEN INVEST, was slightly negative, while the bond portion made a positive contribution.

 

What were the fund’s main areas of focus in the first half of 2025?

In the first half of the year, we kept the equity allocation slightly below 50%, which, however, still contributed negatively to the performance, partly due to the weak US dollar. That being said, the selected equities outperformed the global average, as the new US administration had less of a negative impact on the sustainable investment segment than investors had feared. The bond allocation was invested in the high rating segment, as this is where the green, social, and impact bonds we focus on are available. We kept the duration in the short to medium range.

 

What are the expectations of your fund management team with regard to global economic development and trends, among other things, for the second half?

Political uncertainty is likely to remain in place and continue to cause volatility. We expect trade conflicts to recede into the background after a while and positive measures (deregulation, tax cuts, investment programmes in Europe) to offset the negative effects of higher tariffs. In the Eurozone, a further interest rate cut in the second half of the year or even several interest rate cuts in the USA in autumn could provide tailwinds.

 

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

The fundamental orientation – i.e. the ERSTE GREEN INVEST equity portfolio combined with a high-quality fixed-income portfolio mainly in the green bond segment – remains unchanged. However, depending on the environment, the equity allocation will tend to be slightly higher than in the first half of the year.

 

Please note: investing in securities involves risks as well as opportunities.

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