Market Comments - Q1 2021

Rising market rates and vaccine rollout

In recent months, the huge issue in the market has been rising market rates – especially long-term rates. It can, however, be established that this has not been able to knock the equity market off its feet, and we have even reached new peaks. Generally, we are not concerned when we see interest-rate increases in connection with better macroeconomic indicators and rising growth expectations, but it is obviously relevant to consider whether the market has reached a point where all good news has been priced in for the short term.

The positive growth expectations have recently been reinforced as a natural consequence of a continued successful vaccine rollout. What also contributes to the very positive growth expectations is that the fiscal stimuli continue to support the economies – most recently a massive infrastructure package in the US.

Equity markets declined at the beginning of the quarter but yielded positive returns in February and March. Recently, the returns have for a Danish investor been supported by an increase in the dollar of no less than 3.98% in March. In the light of the rising interest rates and a stronger dollar the emerging markets experienced a difficult end to the quarter and could not quite follow the development in the developed markets.

With respect to yields, we did not see any major returns. However, rising US rates hit emerging market bonds in USD terms which hence landed with a negative return.


The fund*



Latest quarter

2,92 %

2,07 %

0,85 %


2,92 %

2,07 %

0,85 %

* See past performance under the tab Past Performance

Right now
We increased the share of equities at the beginning of March, which was a reasonable decision. Most recently, we have, however, decided to reduce our exposure in favour of developed-market bonds. The decision is based on a slightly positive signal from our total investment process. Our growth indicator is still in an attractive phase, and the long-term trend is still positive but momentum is slowing down, and the sentiment among market participants has turned greedy.
The market appears overheated for the short term, but as mentioned above much good news has already been priced in. Our view that the exposure to equities still looks attractive for the long term remains unchanged, however, and we will increase the share of equities again when the market sentiment returns to normal and/or the growth momentum is re-established. 

Pay attention
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.