News

November ended on a very positive note for the equity and bond markets. The "soft landing" scenario with a slightly weakening economy, which opens up the possibility for central banks to start cutting interest rates as soon as possible in the new year, continues to be the prevailing narrative. The argument is that falling inflation rates will cause real interest rates to rise and central banks will counteract this with interest rate cuts.

Neither a significantly stronger economic slowdown nor a resurgence of inflation is currently expected by the consensus. This assumption is supported by the sharp fall in inflation figures. In the eurozone, overall inflation fell to just 2.4% and core inflation to 3.6% in November. Both figures were well below expectations. The business climate surveys also indicate no further deterioration and are stabilizing at low levels. The much-noticed Ifo business climate index in Germany was even slightly better than expected.

The bond markets recorded significant price gains in the wake of falling interest rates. Five interest rate cuts are now being priced in for the USA in 2024, with the Fed potentially cutting interest rates for the first time as early as March. The ECB is also expected to cut interest rates for the first time from June. Government bonds performed best in this environment. The credit segments also made significant gains, but lagged somewhat behind the performance of government bonds due to their shorter duration. The bond side of the Moventum portfolios was able to participate very well in this development. On the equity side, all major stock markets once again performed positively, led by European and US stocks. The smallest gains were in Japan, where Moventum portfolios are overweight, and in the emerging markets, where the Chinese equity market in particular showed weakness. At style level, value stocks performed better than growth stocks, even if the latter received an additional boost from interest rate developments.

The Moventum portfolios were able to benefit from this with selected value funds. The overweighted healthcare and technology sectors performed solidly within the MSCI World, as the price gains on the equity markets were relatively broad-based this time. The favorable environment for equities and bonds led to price gains in all strategies in the Moventum portfolios. On the bond side, it was not possible to fully participate in the rapid decline in yield levels, as the commitment to reduce volatility continues to include money market-related strategies. On the equity side, the overweighting of Japan created a slight headwind. Some funds with a more defensive positioning were also not quite able to keep up with the market rally.

The PWM portfolio showed a sustained positive performance in the reporting period (20.11. - 04.12.2023), which was broadly supported by corresponding performance contributions from all portfolio components. The market environment benefited the bond and equity funds in particular, all of which performed positively. Tailwinds from rising equity markets and falling bond yields also ensured decent price gains for most mixed funds. Only the uncorrelated Nordea Alpha 10 MA had problems with this one-sided market environment. Alternatives also made a positive contribution overall. Here, for example, Plenum CAT Bond Dynamic delivered its usual stable performance contributions. With the official end of the US hurricane season on November 30, the tail risk is now also falling considerably. The price of gold is now well above the USD 2,000 per troy ounce mark. The development of HANSAgold is correspondingly positive.

More: www.moventum.lu/downloads