Balanced funds: the current investment strategy

Balanced funds: the current investment strategy
Balanced funds: the current investment strategy
(c) unsplash
Share post:

After the partial lifting of the lockdown, all eyes are on the economic data in the various countries. The crucial question for the capital markets remains whether the government and central bank measures have been effective. The investment strategy of the YOU INVEST funds is still driven by the pandemic and by the measures taken to fight and contain the resulting damage.

US government demands negative interest rates

US President Trump has called on the central bank to follow the example of other countries and introduce negative key-lending rates. In their statements, central bank officials have pushed that option back. It is currently not regarded as necessary. Other supporting measures such as the purchase of corporate bonds via exchange-traded funds (ETF) have been launched this week. The actual economic data have started to gradually show the full extent of the economic impact of the lockdown. The markets’ reaction has been very restrained.

We continue to favour equities

In the YOU INVEST portfolios, equities remain invested at 75% of their maximum quotas, with the USA accounting for the lion’s share of the equity contingent. In terms of sectors, we have reduced healthcare by a slight margin, given that it had already come a long way. We remain optimistic for most defensive consumer goods and technology shares. Energy companies account for a small, complementary portion.

Neutral / underweighted / overweighted

Note: Past performance is not indicative of future development.

Bonds: high-yields remain attractive

In the bond sector, we have increased our corporate bond position in the USA. We will continue to mirror the central bank in its purchases with some of our allocation. We have stepped up higher investment grade and high-yield segments, depending on the fund.

Government bonds (CEE) , local currency bonds, hard currency bonds, corporate bonds Note: Past performance is not indicative of future development.

We have increased our high-yield position at the expense of international government bonds in foreign currency. Here, we do not expect any impulses from the currency front, and yields are accordingly low. We are keeping our emerging markets positions as well as our US Treasuries, where we hedge the foreign exchange risk.

Zero interest rate drives gold price

The zero interest rate policy should remain in place for a significant amount of time, lending support to the gold price. Gold should at the very least constitute a stabilising factor in the event of a second wave of corona infections. Here, our allocation remains at 2.5%.


Flexible solutions, professional management, and high transparency: this is YOU INVEST. Erste Bank and Sparkassen, in cooperation with Erste Asset Management, provide an actively managed investment concept for all clients who do not want to manage their own investment but who attach great importance to flexibility and transparency.

The flexible use of a diverse range of asset classes is a crucial factor for the success of any long-term investment. Every asset class comes with a different risk/return profile. In order to optimise said profile, the invested capital is broadly diversified across numerous asset classes, such as money market instruments, bonds, equities, and alternative investments. We also invest in different regions and currencies.

The weighting of the various asset classes is based on the risk specifications of the respective YOU INVEST funds, in connection with their mutual performance correlations. In the overall portfolio, the risk/return profile is the better, the less the individual asset classes are correlated. The negative performance of one asset class can be compensated by the positive performance of another one in the context of the portfolio.

Warning notice:

The YOU INVEST active, advanced, balanced, progressive, solid and RESPONSIBLE balanced may make significant investments in investment funds (UCITS, UCI) pursuant to section 71 of the 2011 Austrian Investment Fund Act.

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


Leave a comment Required fields are marked with *

Your email address will not be published. Required fields are marked *

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 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

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.