Market Comments - Q2 2023

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Updated on 30.06.2023

Central banks quickly put a lid on the banking turmoil in March, which produced decent increases at the end of Q1. This trend continued into Q2 when especially equities benefited from the positive sentiment. This was the case although we have seen significant interest-rate increases as central banks continue hiking their rates.

If we look at economic growth in countries around the world, the situation remains that the manufacturing industry (production of goods) is dominated by setback and falling demand whereas the service sector (retail trade, hotels, restaurants, etc.) continues to benefit from increasing demand and low unemployment. Yet, the last couple of months have also shown slightly weaker trends in the service leg of the economy.
Inflation figures keep dropping back, but this is primarily due to sizeable declines in energy prices whereas core inflation (excluding food and energy prices) remains well above the central banks' targets.


The fund*



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* See past performance under the tab Past Performance

Right now
At end-April, we lowered the proportion of equities in our portfolio a shade. This does, however, not change the picture that the total risk of the portfolio is highly balanced.
Due to historical interest-rate hikes in the past 12 months and a high inflation we still see a risk of dark clouds on the horizon.
Right now, the sun is shining, and sentiment in the markets is positive. This happens on expectations that the central banks have managed to dose the interest rate increases just right for the economies to land softly and that we avoid a major economic downturn.

History shows that a precise "dosage" of interest rate increases is extremely difficult to hit. But the market may live on this belief for a long time and equities will continue to be attractive.

Please note
Past performance is not a reliable indicator of future results. The value of and return on your investment may fall, and you may not get back the full amount invested. An initial charge is usually made when you purchase and sell units. The fund may invest in instruments denominated in various currencies. At least 75% of the fund assets will at all times be invested in EUR or hedged to EUR. You should be aware that changes in exchange rates may have an adverse effect on your investment. This may also be the case if EUR is not your base currency.
Information in this text should not be regarded as investment advice, and investors should consult their own investment and tax advisers before buying or selling.