Yield opportunity in the bond market: May 2021

Yield opportunity in the bond market: May 2021
Yield opportunity in the bond market: May 2021
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The global economy is recovering significantly, starting from the United States. Corporate profits are pointing upwards, demand for commodities is increasing and sentiment indicators are rising strongly. Public spending will continue to support the economy and central bank policy is also market-friendly.

The main risk lies in permanently higher inflation due to a possible overheating of the economy and because of high budget deficits.

This leads to a negative assessment for government bonds from the developed world and also for corporate bonds with good to very good credit ratings. In general, securities with low interest rate sensitivity are preferred in this environment.

A rapid and sharp rise in bond yields poses therefore the biggest threat. Higher bond yields weigh on the stock market, mainly on the growth stocks, and lead to increased volatility.

Development of bond yields of US- and EUR-Government-Bonds and EUR-Corporate-Bonds
Investment-Grade (5/2016-5/2021)

Development of bond yields of European High-Yield-Bonds compared with global High-Yield-Bonds and Emerging-Markets-Corporate-Bonds (5/2016-5/2021)

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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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.