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.)

Fund & Performance

CORE Balanced is a mixed fund of funds and invests between 20% and 30% in equities and up to 80% in bonds. In addition, up to 10% of the portfolio is invested in alternative asset classes. The fund is suitable for long-term capital appreciation.

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 Markus Jandrisevits

How did the fund perform 2023?

The CORE Balanced fund fared excellently at +8,9%, outperforming its peer group by 2.9% according to Morningstar, which put it into the upper range of the 1st quartile.

 

What was the focus of the fund in 2023?

The fund started the year with a neutral equity allocation, which we reduced slightly in March due to the events surrounding Silicon Valley Bank and Credite Suisse and other uncertainties. At the beginning of June, we brought the equity weighting to a neutral level and later, in July, increased it slightly. In September we returned it to neutral due to the emerging global uncertainties. On the bond side, our focus was on EUR government, EUR corporate, and EUR high-yield bonds. We were also holding a complement of USD bonds and government and corporate bonds from various emerging markets.

 

What does the fund management team expect for the second half 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 November, we stepped up the equity weighting and reduced cash.

CORE Balanced

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.