Income-oriented investors are benefitting from the economic recovery
Luxembourg, 19 April 2021 – Investors have reaped a rich harvest over the past few months. “Between February and March 2020, the outbreak of the Corona pandemic and the restriction of public life had caused equity markets to crash”, said Carsten Gerlinger, Vice President of Moventum AM. Since then, however, there has been a strong recovery, which benefitted Moventum’s actively managed portfolios and the ETF/index fund portfolios that were launched in early April 2020. “Timing could hardly have been better; the annual performance is more than outstanding.”
While the defensive portfolio option MOVEactive ETF Defensive has already delivered a return of 16.1 per cent, the offensive option is even up more than 40 per cent in its first year on the market. “The portfolios are therefore well above plan and once again achieved significantly more for investors than could have been expected in April 2020”, Gerlinger pointed out. Actively managed portfolios showed even better returns over the same period, ranging from 21 per cent to nearly 50 per cent. Due to the different investment limits of individual asset classes, however, the performance of the MOVEactive ETFs and of the actively managed portfolios are only comparable to a limited extent.
Stock markets have experienced support from various sources in recent months: China’s economy had already been recovering by mid-2020, which accelerated global demand for industrial goods. Covid vaccination campaigns in industrialised countries have progressed, so that the economy there has also regained momentum, particularly in the US. The government’s major fiscal packages are providing additional momentum. “This will continue to drive the recovery in the coming months”, added Gerlinger.
Industry in particular is showing signs of strength, suffering less from the restrictions on public life in the wake of the pandemic. As the situation returns to normal, however, service providers will follow suit, partly because households have saved enormous amounts in recent months. “Pent-up consumption will be unloaded; there is enough money available”, said Gerlinger.
As a result, the profits of public companies will also rise significantly: In the USA, the consensus forecast for Q1/2021 stands at 25 per cent YOY growth in earnings per share. For Europe, increases of between 25 and 80 per cent are expected in the next few quarters.
Bonds also generated decent returns due to the continued loose monetary policy pursued by central banks, but investors paid for the lower risk with lower returns. This is evidenced by the performance of Moventum’s ETF/index fund portfolios that include first-class investments on a product-neutral and provider-neutral basis and are aimed at investors with an investment horizon of at least five years. Even higher returns were achieved by Moventum’s actively managed portfolios, which have delivered good performance for many years.
Performance of MoventumPlus Active portfolios (1 April 2020 – 31 March 2021, rounded):
Defensive: bonds at least 65%, equities at least 25%. Performance: 21%
Balanced: bonds and equities at least 45% each. Performance: 27.9%
Balanced Europe: bonds and equities at least 45% each. Performance: 26.4%
Dynamic: bonds at least 25%, equities at least 65%. Performance: 36.9%
Offensive: equities at least 90%. Performance: 49.2%
Performance of MOVEactive ETFs (1 April 2020 – 31 March 2021, rounded):
Defensive: Equity ETF 30%, Bond ETF at least 60%, up to 10% precious metals. Performance: 16.1%
Balanced: Equity ETF 50%, Bond ETF at least 40%, up to 10% precious metals. Performance: 22.95%
Dynamic: Equity ETF 70%, Bond ETF at least 20%, up to 10% precious metals. Performance: 32.6%
Offensive: up to 100% Equity ETF, up to 10% precious metals. Performance: 40.2%
Additional information is available at www.moventum.lu