YOU INVEST becomes YOU INVEST GREEN. With the reorganization of the YOU INVEST funds, customers now have the opportunity to invest in actively and professionally managed multi-asset funds with an ESG focus within the framework of this product family. Gerhard Beulig, Senior Fund Manager at Erste Asset Management, explains what this means for investors and who might be interested in YOU INVEST GREEN funds:
What does the reorganization of the YOU INVEST funds mean for investors?
The basic orientation, for example in terms of the equity ratio, remains unchanged, and the return/risk characteristics of the funds will therefore remain very similar. The change will be made by substituting the investment funds in which investments are made and adapting the possible asset classes. The funds used will employ a sustainable investment approach. Some market segments, such as alternative investments, US Treasuries or Chinese government bonds will no longer be invested in for sustainability reasons.
What’s behind the term „sustainability“?
The key word in sustainable investing is “ESG”. This refers to the terms environment, social, and governance – the three core issues of sustainable investing, so to speak. A sustainable fund or investment must meet certain minimum criteria in these three areas. Sustainability in the sense of the ESG standards therefore does not only mean “environmental protection”, but also includes other topics. For example, aspects such as equal rights, human rights or the exclusion of outlawed weapons.
You can find out more about sustainability and sustainable investing here: Sustainability | Erste Asset Management (erste-am.at)
“Some market segments, such as alternative investments, US Treasuries or Chinese government bonds, will no longer be invested in for sustainability reasons.“
– Gerhard Beulig, Senior Fund Manager
How is it ensured that investments are only made in ESG-compliant industries and companies?
On the one hand, the funds used undergo a review of the securities currently held. On the other hand, the entire investment process will also be evaluated. The focal points and exclusion criteria set by the sub-fund managers must correspond to those of Erste Asset Management; an evaluation in this regard is carried out by our sustainability experts.
The stock market environment has been very difficult this year. YOU INVEST funds have also suffered from high inflation and the Ukraine war. How do you assess the situation?
Unfortunately, the entire YOU INVEST fund family was unable to escape the extremely challenging market conditions. As both the stock markets and almost all bond markets recorded significant declines, the performance of the YOU INVEST funds was also negative in the first half of the year – although more stability was brought into the portfolios with a relatively high money market ratio.
The change in the interest rate policy of the major central banks and the tightening of inflation, mainly via energy prices caused by the conflict between Russia and Ukraine, were the main reasons for this. The particularly difficult situation in the first half of 2022 was the fact that there were no asset classes that generated significantly positive returns in an environment of falling equity markets. Thus, the effect of diversification across different asset classes was limited in this short-term period. As already mentioned, the money market share helped to dampen the development.
What advice would you give to investors of YOU INVEST funds?
In challenging times, it is advisable to reflect on the medium to long-term goals that are to be achieved with the investment. Fluctuations in the capital markets can certainly be seen as an opportunity to take advantage of these short-term declines by making favorable purchases, even through fund savings plans (more information on fund savings in turbulent times). The yield level of bonds is more attractive again, an equity share is recommended against the background of the long-term substance-preserving character.
For a glossary of technical terms, please visit this link: Fund Glossary | Erste Asset Management
Prognoses are no reliable indicator for future performance.