Yield opportunities on the bond markets: December 2018

Yield opportunities on the bond markets: December 2018
Yield opportunities on the bond markets: December 2018
Share post:

Real global GDP-growth has already fallen to 2.8% in Q3 2018. A number of economic indicators are suggesting that this trend will continue. For example the flattening yield curve in the US indicates that market participants expect a slowdown in economic activity. Furthermore ther credit growth in China is falling. If the change in credit volume is below nominal economic growth, the momentum produced by credit is negative. This means that the credit environment in China is depressing economic activity. On the positive side: it is expected that the US central bank is turning more cautious. At this point, less than a full hike is priced in for 2019.

The suspension of further tariff increases by the USA on Chinese imports, the cautious statements from the US Fed, and the expansive fiscal policies are supporting the economy and the markets. Risks like a further escalation of the trade conflict, a further weakening of global economic growth (especially in China), and drastic rate hikes by the Fed due to higher inflation are dampening the upward potential of risky asset classes.

Source: Erste Asset Management; www.erste-am.at; Data as of 30 November 2018;

Fund-Ratio: Yield – see footnote 1)

1) NB: the fund ratio “yield” equals the average yield of the securities held by a fund prior to costs for forex hedging; please bear in mind that this ratio is not equivalent to the fund performance. For the fund performance (i.e. the development of the value) of the aforementioned funds, please refer to the overview table on page three. The above-cited table does also not account for any fees reducing return such as the management fee or individual account or depositary fees. 2) The risk classification of investment funds is based on the SRRI-indicator. The calculation is based on European regulatory requirements and forms an integral part of the Key Investor Document and gives the historical volatility of the fund unit price on a scale from 1 to 7, with 7 being the highest risk. More information about the calculation of the indicator: fundglossary.erste-am.com/srri/

Development of bond yields of US- and EUR-Government-Bonds and EUR-Corporate-Bonds Investment-Grade (11/2013-11/2018)

Development of bond yields of European High-Yield-Bonds compared with global High-Yield-Bonds and Emerging-Markets-Corporate-Bonds (11/2013-11/2018)

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.

(more information at www.erste-am.com)

Data as of 30 November 2018.

The performance and volatility (3 years) is calculated in accordance with the OeKB method. It already includes the management fee. However, the illustration is net of the one-off load of up to 3.50%, which falls due at the time of purchase, and of other fees that reduce the return as well as of the individual account and deposit fees. Past performance is not a reliable indicator of the future performance of a fund.


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


Legal disclaimer

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 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.