• Technology and environmental equity funds were the top performers in 2020
  • Optimism on the stock exchanges boosted by hopes of vaccine and in the wake of the US elections
  • Market environment remains positive for risky investments – inflation no issue (yet)
  • Changes in our preferred sectors: focus on European and Asian equities as well as defensive banks, energy, and industrial companies with potential of closing the performance gap

Erste Asset Management (Erste AM), the capital investment company of Austrian Erste Group Bank, is looking back on a turbulent investment year. After the slump in February and March, we saw a strong recovery on the markets almost across all asset classes, but in particular in the technology and environmental sectors. Investors used the lower market prices to increase their existing holdings or to invest in new ones on the fund market, benefiting from the positive market performance on the global stock exchanges.

In the fixed income segment, government and corporate bonds benefited among other things from the monetary measures, especially the bond purchase programmes of the central banks. Emerging markets corporate bonds have also recorded above-average gains in the year to date.

Assets under management of Erste Asset Management above 2019 levels

The result of the US elections and the hope of a foreseeable end of the pandemic on the back of a vaccine have boosted the optimism further. Thanks to the highly positive development of almost all asset classes and sizeable inflows throughout the year, assets under Erste AM’s management now amount to EUR 66.0bn (as of 30 November 2020), i.e. 2.7% above year-end of 2019 (EUR 64.2bn as of 31 December 2019). The segment of sustainable investment funds has grown in importance yet again and now commands a volume of more than EUR 14.0bn.

Fund investors profited from the stock exchange performance

“We did not expect the market to rebound so quickly and to that extent after the slump in spring. This is good news in particular for those who invest their money in funds and who have stepped up their holdings in recent months,” explains Heinz Bednar, CEO of Erste Asset Management. We are optimistic about the outlook for 2021, which will still suggest a favourable environment for investing in funds.”


Recessions triggered by external shocks are usually short-lived

Chief Investment Officer Gerold Permoser was particularly impressed with the speed of the market recovery. “The markets bounced back more quickly and massively than during the Lehman crisis.” Recessions triggered by external shocks are usually short-lived because the economy as such is healthy. And in this case, the economy behaved exemplarily. The stimulus package in the USA was the turning point. Governments and central banks reacted much faster than in 2008/2009. Therefore, the focus of the coming months will be on the interplay between fiscal and monetary policy. Real interest rates are extremely low at the moment, but even in the event of a slight increase in inflation, real yields would continue to fall in 2021. This stimulates the economy and provides the governments with room for manoeuvre.

Permoser: 2021 will be a “year of recovery

The November rally gave us a short preview of 2021, the Year of the Taurus, i.e. a year of recovery with improving political stability, no tax hikes, and a more effective fight against the pandemic. There should be at least three safe vaccines by the beginning of 2021. The UK has already started to roll out its vaccination programme. Permoser: “The burden of COVID is on the decline, the political situation is more favourable than a year ago, and the economic recovery is taking hold,” says Permoser.

Erste AM: equities remain top of the list – “laggards” may catch up

Phases of economic recovery are good for the equity markets. This asset class therefore remains on top of the list for Erste AM in 2021. We might see sector rotation on the market: cyclicals may outperform other sectors. The focus of mixed funds is on European equities and sectors with a performance gap to close, i.e. banks, energy, and the industrial sector. Here, Europe is in a better position than the USA. If cyclicals were to end up outperforming the market, this would also be good news for Austrian equities, as the ATX index contains numerous of those companies, explains Permoser. In addition to Europe, the Asian stock exchanges (including Japan) also offer good investment opportunities.

In the fixed income sector, Erste AM relies on European and US corporate bonds and emerging markets government and corporate bonds, which have also seen a good performance this year. Euro government bonds and US Treasuries, on the other hand, have largely been taken out of the mixed funds as they are currently not attractive.

In addition to cyclicals, Erste AM regards funds that focus on megatrends and sustainable investment funds as attractive due to the result of the US election and upcoming regulations to fight climate change.

For more information, please visit www.erste-am.at/en

About us:

Erste Asset Management manages assets worth EUR 62.8bn (as of 31 October 2020). About 100 investment professionals across numerous countries work in the Investment department of Erste Asset Management. In order to ensure an optimised management process, the Erste Asset Management fund managers cooperate closely with our in-house Research department.

Erste Asset Management is a pioneer and market leader in the field of sustainability in Austria: the first environmental equity fund was issued as early as in 2001 and has been co-managed with WWF Austria since 2006


For enquiries, please contact:
Communications & Digital Marketing

Paul Severin
Tel. +43 (0)50 100 19982
E-Mail: paul.severin@erste-am.com

Dieter Kerschbaum
Tel. +43 (0)50 100 19858
E-Mail: dieter.kerschbaum@erste-am.com

Erste Asset Management GmbH

Am Belvedere 1, A-1100 Wien
Sitz Wien, FN 102018b,
Handelsgericht Wien, DVR 0468703


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.