Global economic and financial market outlook
Resilience despite uncertainties
The combination of surprisingly robust economic growth, the ongoing AI boom, high earnings growth, and the Fed's key-lending rate cuts continues to create a favourable environment for the financial markets. In spite of high valuations, significant budget deficits, increasing protectionism and political dysfunction – particularly in the USA and France – the underlying sentiment remains positive. That being said, the downside risks associated with the slowing employment growth in developed economies should not be underestimated.
Macroeconomic environment
Global growth is on track at 2.6%, with developed economies growing at 1.7%. Inflation remains above target in the base-case scenario, particularly in the USA, where tariff increases and a strong labour market are driving up prices. Central banks are acting cautiously: the Fed and the ECB have begun to cut interest rates but remain flexible in view of the uncertainties.
Equities
We are maintaining a neutral equity weighting. While earnings growth and momentum are convincing, high valuations are calling for caution. Regionally, we favour Europe and keep Japan neutral, while the USA and Asia excluding Japan remain underweighted. Latin America remains overweighted due to attractive valuations. Sector-wise, we are focusing on the US healthcare and the European energy sectors and prefer value and small-caps in Europe.
Bonds
Overall, duration remains neutral. Bonds are overweighted in the Eurozone, supported by falling inflation, while we have kept US bonds underweighted – here, loss of confidence and fiscal risks are weighing on the market. Local currency bonds from emerging markets are benefiting from key-lending rate cuts, whereas hard currency bonds are underweighted.
Commodities
Gold remains overweight as a hedge against inflation and government debt risks, as well as protection against political pressure on independent institutions. Industrial metals and energy are underweight, as demand – particularly from China – remains weak and there is an oversupply.
Currencies
The US dollar remains underweighted against the euro. Erratic US politics and structural deficits are weighing on the attractiveness of the USD. The British pound and Japanese yen are neutrally weighted against the euro.
We expect markets to remain resilient and selective opportunities to continue to arise. The biggest risks remain political missteps, persistently high inflation, and geopolitical shocks. Broad diversification and a focus on quality therefore remain essential for investment success. Please note: investing in securities involves both opportunities and risks.
Source: Erste Asset Management, October 2025
Notes: Forecasts are not a reliable indicator of future performance. Where fund portfolio positions are disclosed in this document, they are based on market developments as at 9 October 2025. These portfolio positions may change at any time as part of active management. Please note that investing in securities involves risks as well as the opportunities described.
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Disclaimer
This document is an advertisement. Please refer to the prospectus of the UCITS or to the Information for Investors pursuant to Art 21 AIFMG of the alternative investment fund and the Key Information Document before making any final investment decisions. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.
The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to Art 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011.
The fund prospectus, Information for Investors pursuant to Art 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the web site www.erste-am.com within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.
The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.
Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to Art 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.
Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.
The issue and redemption of unit certificates and the execution of payments to unit holders has been transferred to the Fund's custodian bank/depositary, Erste Group Bank AG, Am Belvedere 1, 1100 Vienna, Austria. Redemption requests can be submitted by investors to their custodian bank, which will forward them to the Custodian Bank/Depositary of the Fund for execution via the usual banking channels. All payments to investors are also processed via the usual banking clearing channel with the investor's custodian bank. In Germany, the issue and return prices of shares are published in electronic form on the web site www.erste-am.com (and also at www.fundinfo.com). Any other information for Shareholders is published in the Bundesanzeiger, Cologne.