• Global economic growth is deteriorating, but the labour market remains robust
  • Central banks have reacted early by announcing loosening measures
  • Equities and bond categories with higher yields (e.g. emerging markets and US corporate and mortgage bonds) remain attractive

The first half of 2019 is over. Many asset classes on the international financial markets recorded significant price increases. Important equity indices such as the Dow Jones, the S&P 500, and the US technology index Nasdaq set new historic highs at the beginning of July. Prices were being driven by the hope of an expansive central bank policy (especially in the USA) and by the solid company results.

Due to the increased risk appetite among investors, bond yields were down, and bonds across the board posted gains. Even government bonds recorded a surprisingly good development: for example, the yields of 10Y German government bonds fell to a record low of -0.4% at the be-ginning of July. In the so-called peripheral countries and the emerging markets, yields were down substantially. Thus, all asset classes recorded unexpectedly significant gains in the first half of 2019.

gerold permoser

Looser monetary policy supports markets

Erste Asset Management, the investment company of Erste Bank und Sparkassen, expects growth to deteriorate in the second half of 2019. But: “From today’s perspective we do not en-visage a slump; real global GDP growth should be in a bandwidth of +2.0 to +2.5% in 2019 after +3.0% in 2018,” explains CIO Gerold Permoser (source: “Global Economic Prospects“, World Bank).

Inflation in the developed economies is low. Important central banks have announced steps towards a looser monetary policy. For the USA, the markets have rate cuts of percentage point priced in. “A rate cut of 0.25 percentage points at the end of July is very likely,” as Per-moser points out. Only half a year ago, the market was expecting rate hikes.

Labour market as engine, trade conflict defused

The imminent reporting season should give an insight into the earnings development in the corporate sector. Thanks to the economic boom phase of recent years, the labour market is still strong in many parts of the world. The low unemployment rates are driving income and consumption growth. The political risk is on the decline as well. The fact that – as was announced on the sidelines of the G20 summit in Japan – the negotiations between China and the USA would be resumed has calmed the markets. This has done away with the risk of an imminent escalation in the trade and technology conflict.

Equities remain favourites among the investment classes

In an environment of low inflation and slightly weaker yet intact growth opportunities, the focus of Erste Asset Management in its asset allocation is on equities and emerging markets bonds as well as US corporate and mortgage bonds. “As long as the profit margins of companies do not come under more pressure and the political uncertainties do not escalate (e.g. the trade conflict between the USA and China, Brexit, or the conflict between the USA and Iran), equities will remain attractive,” says Permoser.

Active management in eventful markets

The line of mixed funds that Erste Asset Management offers, i.e. YOU INVEST (founded in
2013), is an attractive way of participating in the capital market. The assets under management of the currently five funds amount to EUR 1.07bn (as of 28 June 2019; source: Erste AM). The umbrella funds invest in a balanced mix of diverse asset classes, including government bonds, corporate bonds, and international equities. The composition and weightings of the asset classes in the various YOU INVEST funds depends on a clearly defined risk/return profile.

In the year to date, the funds have gained 3.7% to 9.7%*. Since their inception, they have all recorded a positive performance of 1.7% to 2.3% per year* (data as of 28 June 2019; source: Erste AM; calculated according to the OeKB method).

*Performance calculated according to the OeKB method. The performance accounts for the management fee. It does not allow for a one-time load of up to 4.00%, if applicable at the time of purchase, nor any other fees reducing return such as individual account or depositary fees. Historical performance data are not indicative of the future development of the fund.

Important legal notices:
Forecasts are no reliable indicator of future developments.


Erste Asset Management (Erste AM) coordinates and is responsible for the asset management activities within Erste Group. At our locations in Austria, Croatia, Czech Republic, Germany, Hungary, Romania, and Slovakia we manage assets of about EUR 60,07 (as of 31 May 2019).

For enquiries, please contact:
Communications & Digital Marketing

Dieter Kerschbaum
Tel. +43 (0)50 100 19858
E-Mail: dieter.kerschbaum@erste-am.com

Erste Asset Management GmbH

Am Belvedere 1, A-1100 Wien
Sitz Wien, FN 102018b,
Handelsgericht Wien, DVR 0468703



This document is an advertisement. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 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 § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions at the  web site 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 investor document is available, and any additional locations where the documents can be obtained can be viewed on the web site 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.

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. 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. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. 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.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of fund shares to American citizens. Misprints and errors excepted.