Yield opportunity in the bond market: December 2020

Yield opportunity in the bond market: December 2020
Yield opportunity in the bond market: December 2020
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Risky securities have shown a very good return performance in recent weeks. Equity prices have continued to rise and credit spreads have reached, or are well on their way to pre-pandemic levels.

Arguably the most important element for capital markets is the positive vaccine news. The baseline scenario is for a bumpy, uneven and partial recovery. Bumpy, because GDP in Europe will contract in the fourth quarter and that in the U.S. could also fall in the first quarter. Inconsistent, because some sectors and countries are less affected by the pandemic than others. Sectors in the service sector, those with direct customer contact, have been particularly hard hit.

The prospect of herd immunity fuels hopes for a sustained recovery in the global economy. The risk lies in a more abrupt than expected recovery and, in some cases, longer-term economic damage in certain sectors.

Development of bond yields of US- and EUR-Government-Bonds and EUR-Corporate-Bonds
Investment-Grade (12/2015-12/2020)

Development of bond yields of European High-Yield-Bonds compared with global High-Yield-Bonds and Emerging-Markets-Corporate-Bonds (12/2015-12/2020)

 

Please note:
The development of historic yields is not a reliable indicator for future developments of a specific asset category or asset class. The charts above do not include any fees or costs.

Ratio-Overview (more information and all risk notes can be found at www.erste-am.com)

 

Legal note:
Prognoses are no reliable indicator for future performance.

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The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. 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 connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions at the web site www.erste-am.com or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the key investor document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com.

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.