Erste Asset Management (EAM) has excluded companies that derive more than 30% of sales from coal mining from its mutual funds. In doing so, EAM is one of the first asset managers to have taken this step. “This was the next logical step for us, having excluded coal mining from our sustainable funds at the beginning of the year,” as Heinz Bednar, CEO of Erste Asset Management, explains.
In its new World Economic Outlook, the International Monetary Fund projects the global economy to grow by 3.1% in 2016, following 3.2% growth in 2015. In contrast to the industrialised nations, growth in emerging markets and developing economies is expected to pick up in 2016 (by one tenth of a percentage point to 4.2%), which marks an increase of 0.2% compared with 2015. The difference in growth between the industrialised nations and the emerging markets is therefore expanding, with the dynamics taking place in the emerging markets. This development shows nicely in the excellent performance of emerging market bonds in this year.
The statements of the US Federal Reserve to possibly increase the Fed Funds Rate in December did not lead to increased volatility. The yields of sovereign bonds trended slightly upwards, with ten year German Bunds approaching the zero yield line (from below), ten-year US treasuries yield at about 1.7%.
Uncertainty is high, while volatility is low. How to resolve the contradiction?
In many people’s opinion, green gene technology is the only option to solve the problem of food security. The seeds market is dominated by a handful of companies and this development has been exacerbated by the increase in patents on seeds and grains. This raises the question of whether the basic idea of patents, which are supposed to promote innovation and inventions, make sense in connection with food.
Equities got off to a terrible start into 2016. At the end of February, a short but intense sell-off was triggered by the emergence of concerns over a slump of the global economy in connection with China. However, since mid-February the international indices have been on the rise without any significant breaks. Not even the much-feared Brexit vote managed to dent the upswing. Although share prices were down in the immediate wake of the decision of the UK to leave the EU, they rebounded very swiftly. Read more
Bond yields were up last Friday, whereas equities recorded losses. Signs that the bull market with low volatility, which started after the Brexit vote, is drawing to an end are becoming more plentiful.
In the weeks following the Brexit referendum, the prices of many asset classes were rising amid mild fluctuations. However, an increasing number of clues suggest higher fluctuation for the coming months.
Real estate has been in high demand from investors for a while. The keen interest in “concrete gold” has also moved the shares of real estate companies into the limelight of investors.
ESPA RESERVE CORPORATE: 3 questions for Bernd Stampfl, fund manager.
The Brexit-vote was a non-event, it seems. At least, that is what global equity markets are telling us. Since June 24 – the day after the referendum – US, European and Japanese indices all have gained around 10% in local currencies (up to August 19). Emerging Markets, on average, made a similar move as well. Whether the rally will continue depends on a number of factors, pointing in opposing directions. While the fundamental backdrop suggests remaining cautious and also valuation is not supportive, low bond yields and economic policy will likely continue to provide tailwinds for global equity markets.