Israel has launched air strikes against Iran. The targets are nuclear sites and military facilities. Iranian commanders have also been killed. According to Iranian media reports, one of the two most important nuclear sites in Natanz has been hit. The head of the Revolutionary Guards and other leading military figures have been killed. Leading scientists have also fallen victim to the attacks.
According to reports in Israel, dozens of air strikes have been carried out. The attacks could last up to two weeks. In addition, the Israeli side announced that Iran had fired approximately 100 drones at Israel. The US has emphasised that it is not involved in the attack.
The market reaction is classic: oil prices have increased significantly. The price of oil (measured by Brent) has risen from 69 US dollars to 74.5 US dollars. The stock markets are reacting with price declines. Futures for the major stock indices are down on Friday morning. For example, futures for the S&P 500 are down 1.4%. At the same time, government bonds (US, Germany, United Kingdom) are showing price increases (or yield declines). The US dollar is also showing slight strengthening against other currencies. This shows that government bonds and the US dollar fulfil their function as a safe haven in a crisis situation.
Please note: Investing in securities involves risks and opportunities. The individual securities and indices listed have been selected as examples and do not constitute investment recommendations.
Positioning and market expectations
Our general risk appetite is currently slightly defensive. In the short term, current events are having a negative impact on our opportunity-oriented investments such as equities (neutral positioning) and high-yield bonds. At the same time, our overweight position in euro government bonds is good, as is our gold position, which is proving to be stabilising in an uncertain market environment.
We expect Iran to retaliate, which is also reflected in the initial market reaction (see above). Furthermore, the conflict could last longer this time than in previous exchanges, as Israel’s stated goal this time is to destroy Iran’s missile and nuclear programmes.
Nevertheless, we do not currently plan to make any changes to our positioning in the portfolios or funds. We do not expect the geopolitical situation in the Middle East to escalate into a large-scale conflict, as Iran lacks key allies for this. The most significant channel of transmission to the global economy remains the oil price. If this rises sustainably, it could fuel inflation and weigh on global growth.
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 www.erste-am.com 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 www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights 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 www.erste-am.com.
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.
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