In the beginning of July our Investment Committee held its monthly meeting. Despite a largely negative month on the markets, our risk stance has hardly changed relative to the previous month.
Editorial: Gerold Permoser, CIO and CSIO of Erste Asset Management, comments on the topic of this issue.
Lasting Words: “Everything used to be better. What is plastic today was natural rubber back then,” says Gerold Permoser, CIO and CSIO of Erste AM.
Positive opportunities still outnumber the negative ones on the capital markets – that was the conclusion of our Investment Committee. Our willingness to take risks is still optimistic and also moderately higher than in April.
On 3 April, we held our monthly Investment Committee meeting. Only three weeks after the previous one – three weeks that were tightly packed with issues, as we can see in the performance data of the most important asset classes. Equities and high-yield bonds have lost value, whereas Eurozone government bonds and emerging markets bonds have recorded gains. An upside-down scenario, compared to previous months.
On 14 March our Investment Committee met, and as always, we started out on a discussion of our risk stance, i.e. our risk assessment. From my point of view, four findings of the discussion are worth bringing up here:
Gerold Permoser is Chief Investment Officer (CIO) of Erste Asset Management. In this function he is in charge of the asset management activities and investment strategies of all investment funds of the Erste Asset Management Group in Austria, Croatia, Czech Republic, Germany, Hungary, Romania and Slovakia.
The year 2018 had started on such a promising note – is what we all were thinking. But at the beginning of February, the market taught us a lesson. As a result, the discussions at our first Investment Committee of the year at the beginning of February were interesting ones.
There are many factors that may affect inflation. Also, the weights of certain factors may vary across countries. Take the development of the exchange rate, for example.
At the moment the environment on the markets is very supportive. The economy is booming, the big central banks are still buying government bonds on aggregate and are thus keeping yields low, and the tax reform in the USA has improved the sentiment further over the past weeks. In addition, most asset managers agree on the status quo. Given this background, people ask “when will the party end?”. An increase in inflation is (one of) the usual suspect(s).