Market Comments - Q3 2024
Market development
Q3 was positive, but also with many bumps along the way and more fluctuations than we have been used to this year. In early August, we saw equity prices fall by 7%-8%. The nervousness emerged after some poor economic indicators and an announcement of interest rate hikes in Japan. This led to a rise in the Japanese yen which hit speculative equity investments. The turmoil in the financial markets did not last long, however, and the equity market quickly regained its positive trend. A key reason was that both the European Central Bank (ECB) and the US Federal Reserve (Fed) signalled interest rate cuts as inflation has now calmed down enough for interest rates to be lowered again. The ECB cut interest rates by 0.25% in September whereas the Fed cut its rates by 0.50%.
Performance
In the third quarter of the year, all risk profiles posted positive returns. Global equities continued to rise and set up new record-high levels while interest rates fell, resulting in excellent bond returns.
|
The fund* |
Benchmark |
Diff. |
Latest quarter |
4,45% |
4,10% |
0,35% |
Year-to-date |
10,57% |
8,68% |
1,89% |
*See past performance under the tab Past Performance |
Right now
So far, the US election due on 5 November has dominated the media and probably less so in the financial markets as the focus of attention has been increasingly on economic growth and interest rate cuts.
We believe that this will also be the case in Q4 since it is the growth picture that boosts returns on equities and bonds for the long term. We believe, however, that the US election, as well as for instance an escalation of the war in the Middle East, could mean that we as investors must be prepared for a continuation of the trend towards steeper market fluctuations in the coming months.
This is not necessarily negative news. For example, we took advantage of the equity market correction in August to sell some bonds and buy some equities to ensure that the portfolio had the proper allocation.
Whether we will increase or decrease the proportion of equities in the coming period of time will depend on the trend in economic growth. As always, we follow our investment process in this respect.
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.