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Yield opportunity in the bond market: Q4 2021

Yield opportunity in the bond market: Q4 2021
Yield opportunity in the bond market: Q4 2021
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The market participants follow the current developments in supply bottlenecks in the industry and the rising inflation rates due to the sharp rise in energy and raw material prices.
Associated with this is the risk of stagflation and an earlier than expected rise in key interest rates.
The estimates for economic growth in the second half of 2021 have been revised dowwards. Global growth is expected for the second half of the year below the value for the second quarter. Estimates for inflation are risiing, and possible key rate hikes have also
been factored into yield curves.
The key question is: will these trends continue? The greatest downside risk for economic growth comes from rising energy prices and persistent bottlenecks in the manufacturing sector (production of components, transport). The base scenario remains the recovery scenario: the bottlenecks will decrease, while private consumption has a distinct catch-up potential. The
interaction between the labor market and central bank policy is decisive for the inflation outlook.

Development of bond yields of US- and EUR-Government-Bonds and EUR-Corporate-Bonds
Investment-Grade (11/2016-11/2021)

Development of bond yields of European High-Yield-Bonds compared with global High-Yield-Bonds and Emerging-Markets-Corporate-Bonds (11/2016-11/2021)

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.

ERSTE RESERVE EURO PLUS,  ERSTE BOND EURO MÜNDELRENT, ERSTE BOND INFLATION LINKED, ERSTE BOND EURO RENT, ERSTE MORTGAGE, ERSTE BOND USA CORPORATE, ERSTE BOND DANUBIA, ERSTE BOND CHINA  intends to invest more than 35% of its assets in securities and/or money market instruments of public issuers. A detailed list of these issuers can be found in the prospectus, para. II, point 12.

ERSTE MORTGAGE may make significant investments in derivatives (including swaps and other OTC derivatives) pursuant to section 73 of the 2011 Austrian Investment Fund Act.

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Paul Severin has worked at Erste Asset Management since April 2008. Until 2012 he was responsible for the company’s product management; he has directed communications and PR activities since April 2012. From 1992 to 2008, he was director of equity fund management and deputy director for institutional funds at Pioneer Investments Austria in Vienna.

His career in the securities business began in 1992 at Constantia Privatbank as a portfolio manager and analyst. He worked as primary analyst at Creditanstalt Investmentbank in Vienna from 1994 to 1999.

He studied international business at Innsbruck University and Marquette University in Milwaukee, WI, USA. Before his university studies, he worked at Dornbirner Sparkasse in letters of credit and export financing.

Paul Severin is a member of the board at ÖVFA (Austrian Association for Financial Analysis and Asset Management) and a CEFA charter holder.

Paul Severin is also on Twitter: @paulseverin

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This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published 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 Information Document can be viewed in their latest versions at the web site www.erste-am.com within the section mandatory publications 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 Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to § 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

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.

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