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China is struggling to recover

The positive PCE inflation data will alleviate, but not completely dispel, the Fed's concerns that inflation will remain above target for an extended period. The annual rate fell from 2.8% in April to 2.6%, the lowest level since March 2021. Inflationary pressures remain high in the services sector, where prices rose by 3.9% year-on-year after 4.0% in April. Consumers continue to spend money, which is mainly due to wage growth. Overall, the US economy is losing some momentum as fiscal stimulus is waning. Significant wage growth can also be observed in the eurozone, while economic development is slow. The preliminary estimates of the purchasing managers' indices for June point to a decline in economic activity. The overall index fell from 52.2 to 50.8 points. In Germany, the Ifo index fell from 89.3 to 88.6 points in June, contrary to the market consensus. While the sub-index for the assessment of the current situation stagnated, companies assessed their business prospects less favorably.

Japanese industrial production rose more strongly than expected in May. The yen exchange rate, which fell to a 38-year low, had a supportive effect. Profits in Chinese industry rose much more slowly in May. The world's second-largest economy is struggling to recover as weak domestic demand is holding back overall growth. While exports have been strong, the real estate sector has not responded to the announced rescue package. The Swiss National Bank lowered its key interest rate by 25 basis points to 1.25 percent, while the Norwegian central bank left interest rates at a 16-year high of 4.5 percent and stated that a first rate cut is not expected before 2025. Yields on safe government bonds have risen over the past two weeks. US government bonds with a ten-year term were yielding 4.4 percent on Friday. The Bund yield rose eight basis points to 2.5 percent. In contrast, higher-yielding investments in corporate bonds achieved a slightly positive result due to lower risk premiums and shorter duration.

From the 17.06.2024 - 28.06.2024, the Moventum portfolios were able to limit losses on the bond side due to their shorter duration positioning. The overweighting in corporate bonds at the expense of safe government bonds also made a positive contribution. On the equity side, small caps performed slightly better than large caps. The eurozone and emerging markets performed particularly well, while the UK and Japan were slightly down. The US dollar exchange rate remained unchanged. On the allocation side, this had no major impact on the Moventum portfolios. While the overweighting of the eurozone and the underweighting of the UK had a positive effect, the overweighting of Japan and the underweighting of the emerging markets had a negative impact.

At sector level, the relative contributions were also fairly balanced. The overweighting of energy and communication services had a positive effect, while the overweighting of technology stocks and the underweighting of financials and consumer discretionary were negative. At style level, value performed slightly better than growth and the positioning in the Moventum portfolios was detrimental. In an environment of slightly positive equity and negative bond markets, the Moventum portfolios performed in line with the market. The higher the bond component, the better the relative performance. The reason for this was the positioning on the bond side with a shorter duration and an overweighting of corporate bonds at the expense of safe government bonds. This reduce price losses.

The PWM portfolio proved to be well diversified and robust in the reporting period. While the bond side remained stable with shorter duration and flexible strategies, the other portfolio components achieved positive results. On the equity side, valuation-oriented fund strategies helped. Positioning in precious metals and diversified commodities made a significant contribution to performance. The alternatives segment also performed slightly positively with the help of the CAT bond fund.


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