Erste Asset Management

Attack on Israel

Attack on Israel
Attack on Israel
Share post:

The smouldering conflagration in the Middle East reached a new level of escalation last weekend. Iran attacked Israel directly with drones and missiles for the first time in history. There is a risk of further escalation between Iran and Israel. However, there are indications that the situation will remain in a balance, albeit a fragile one, at least in the short term. Iran had announced the attack so that Israel and its allies could prepare for it. In fact, the damage caused was minimal, even if the defense cost a lot of money. Moreover, political analysts argue that both Israel and Iran can now present themselves as winners. Israel successfully repelled the attack. Iran has dared to attack Israel directly, thereby demonstrating its strength. In addition, Iran has announced that the retaliatory measure is the end of the matter.

Stock markets hardly changed

To date, no typical significant market reactions to increasing geopolitical uncertainty have been observed. The prices of credit-safe bonds such as US government bonds and German government bonds have not risen, the US dollar has not strengthened and share prices have not fallen. The price of oil has not risen either.

Market expects the conflict to remain regionally limited

The market is therefore pricing in the fact that the conflict in the Middle East will remain limited and will not have a global impact.

We share this view and are leaving our asset allocation unchanged. A classification along the axes of economic growth and inflation helps in the search for a correct assessment of the economic scenario. The (more broadly based) global economic growth at potential and inflation above the central bank target provide an indication of the “inflationary growth” phase. In line with this, we continue to classify equities, corporate bonds with a low credit rating (high-yield bonds) and emerging market bonds as attractive for our tactical asset allocation. In relative terms, the attractiveness of bonds (government and corporate bonds) is low. On the positive side are the favorable economic development, satisfactory corporate profits and the high demand for yield. However, indicators suggesting a short-term overbought market situation and valuations that are slightly above historical averages call for caution. Inflation could continue to surprise to the upside, central banks could indicate a more restrictive stance, corporate earnings could disappoint and the geopolitical situation could intensify. For this reason, equities remain neutrally weighted.

For a glossary of technical terms, please visit this link: Fund Glossary | Erste Asset Management

Legal note:

Prognoses are no reliable indicator for future performance.


Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. 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 conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the key information document is available, and any other locations where the documents can be obtained are indicated on the website A summary of the investor rights is available in German and English on the website and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at

N.B.: The performance scenarios listed in the key information document are based on a calculation method that is specified in an EU regulation. The future market development cannot be accurately predicted. The depicted performance scenarios merely present potential earnings, but are based on the earnings in the recent past. The actual earnings may be lower than indicated. Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance.

Please note: Past performance is not a reliable indicator of the future performance of a fund. Investments in securities entail risks in addition to the opportunities presented here. The value of units 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 units. Persons who are interested in purchasing units 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 different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

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

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice, does not take into account the legal regulations aimed at promoting the independence of financial analyses, and is not subject to a prohibition on trading following the distribution of financial analyses.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the referring Sparkassen banks and Erste Bank.

Please also read the “Information about us and our securities services” published by your bank.

Subject to misprints and errors.

Leave a comment Required fields are marked with *

Your email address will not be published. Required fields are marked *