The economy continues to grow strongly and on a broad basis. At the same time, we can see that the momentum is faltering. The monetary policy has become noticeably more restrictive. Bank of Japan recently announced that it was internally pondering exit scenarios for its asset purchase programme. The ECB is expected to terminate its programme within the coming twelve months. Federal Reserve, Bank of England, and Bank of Canada will soon raise their interest rates further.
“Don’t put all your eggs into one basket” – who has not heard this old stock market adage. With Easter approaching, we are having a closer look with the latest figures.
In the past two days, the stock exchanges, spearheaded by the New York Stock Exchange, have shed the entire previous gains of 2018. Even last week, inflation worries had started to weigh on the markets. But the recent reaction was extraordinarily strong, with experts likening it to the excellent employment report in the US.
Capital markets recorded a positive year of 2017. The performance of the various asset classes was of the textbook variety: the higher the risk, the higher the return. At slightly more than 1%, even low-yield asset classes such as euro government bonds or US Treasuries (in USD) posted positive rates of return1). This came as a surprise seeing that many experts had expected higher yields for government bonds, which would have come with negative effects on prices.
Logistics makes sure the economy keeps moving. Today our world would not be conceivable without it.
From an economic point of view, the multiple transport of goods across Europe does make sense but from a sustainable point of view, the environment suffers from increased CO2 and fine particle pollution, exhaust gases and noise. The speed at which goods are transported increases steadily and thus also the burden of the workers involved therein.
By channelling their assets into microfinance funds, investors can contribute to reducing child labour. This is the opinion held by Martin Cech, Senior Fund Manager with Erste Asset Management.
We have talked to the ESG analyst team of Erste AM about Trump’s withdrawal from the Paris climate accord in a roundtable discussion: Dominik Benedikt, Alexander Osojnik, Stefanie Schock, and Walter Hatak.
Last Thursday, incriminating video and audio tapes emerged that linked current President Michel Temer to bribery. The accusations have thrown Brazil into a deep political crisis, and the capital markets have lost massively.
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.