Central Banks startet to reduce their expansive monetary stance. The confidence to achieve the inflation goals improved, given the strong economic growth data. In the US the start of the tapering program is expected in autumn, the probability for a further increase in the Fed funds rate in December was lately at 40%. The ECB will start the discussion regarding a possible tapering also in autumn.
Volatility has increased on the markets. The main reason for this has not occurred often in the past years: statements by the central bankers according to which the extremely expansive monetary policy will be reeled in. Are we going through a trend reversal?
Author: Stefan Rößler
Fund manager Fixed Income
The real estate bubble started to burst in the USA roughly ten years ago, tossing the global economy into a severe recession mainly on the back of contagion effects in the financial sector.
In order to avoid a bad situation from getting worse, many financial institutes had to be bailed out by governments and thus ultimately by the taxpayers. One of the learning points of the financial crisis is to prevent taxpayer-funded bank bail outs in the future.
Imagine a fairy that grants you three wishes. What would you wish for? The answer would be very easy for me. I would just like to know if the economy is caught up in a recession of has embarked on an expansionary phase a year from now. And whether the central bank will be pursuing an expansive or restrictive policy. If I got these two wishes granted, I would even forego the third one. Or, as a good fund manager, I might engage in risk management and save up for bad times. Growth and monetary policy are of significant relevance to the return of almost all asset classes.
Two developments are prominently noticeable on the markets at the moment: on the one hand, the indicators of real economic growth suggest a stable real economic growth rate of about 3%. On the other hand, we have seen global consumer price inflation decline since the beginning of the year. The reflation phase, i.e. the general increase in inflation in the second half of 2016, seems to be over (for now).
Author: Christin Bahr, Product Management Securities Erste Group
It has been half a year since the launch of the new hybrid bond fund. Reason enough for us to talk to Roman Swaton, Senior Fundmanager.
Author: Dieter Kerschbaum, Communications Specialist Austria
On 31 May the Vienna Stock Exchange Award will be celebrated and awarded to the winner. The day is dedicated to the financial centre of Austria, and the award is accompanied by numerous other events that are geared towards drawing investors’ attention to the domestic stock exchange. Erste Asset Management is one of the biggest investors at the Vienna stock exchange. In the past five years, the Vienna stock exchange has seen a clear upward trend. We spoke about the reasons for the steep upswing, possible risks, and the future perspective with Bernhard Ruttenstorfer, manager of the equity fund ESPA STOCK VIENNA:
Markus Jandrisevits has been the manager of our global flagship equity fund ESPA BEST OF WORLD since 28 February 2002. The performance to date is impressive on an international scale. I asked Markus what was special about his investment approach and how he has positioned himself in the current stock market phase of high political risks.
The interest rates, or coupons, that bonds pay differ due to a variety of parameters. If bond A pays a higher interest rate than bond B, this premium is referred to as spread.
The rate of inflation has been quite substantial most recently, in comparison with the recent past and surprisingly so for many market participants. The harmonised consumer price index for the Eurozone was 2% higher on a year-on-year basis in February, which was also the highest value since 2013.