In September all open-end investment funds managed by us – both stock funds and bond funds – demonstrated good results and ended the month with an increase. All funds also showed considerable growth since the beginning of the year.
Net increase of investment certificates value of ABLV investment funds:
|
|
31.08.2012 – 30.09.2012 (1 month) | 31.12.2011 – 30.09.2012 (9 months) |
| ABLV Emerging Markets USD Bond Fund | 1.84% | 13.30% |
| ABLV Emerging Markets EUR Bond Fund | 1.69% |
12.93% |
| ABLV Global USD ETF Fund | 2.54% |
8.79% |
| ABLV Global EUR ETF Fund | 0.81% |
8.85% |
| ABLV High Yield CIS USD Bond Fund | 1.65% |
13.60% |
| ABLV High Yield CIS RUB Bond Fund* | 0.82% |
4.52% |
Actions by management company ABLV Asset Management, IPAS
ABLV funds’ managers acted in accordance with the strategy set earlier. It should be noted that in August, given bad macroeconomic data on the one hand and anticipated massive support to the economy by the world’s central banks on the other hand, manager of the stock funds adopted a wait and see attitude. However, after there appeared definite signs of those anticipations becoming true, early at the month it was decided to restore most previously closed positions. Further developments proved that this decision was correct. In the medium term, the main strategy for the stock funds will be “holding”, allowing for tactical decisions to fix profits under particular positions if those reach target levels.
“Holding” strategy also remains the main strategy for bond funds. Moreover, the funds’ structure still includes increased share of high-yield bonds, given strong risk-seeking attitude demonstrated by most market participants.
Results of the funds’ performance as at 30 September 2012 are available here:
Current situation in stock markets
In September, expectations of the world financial market participants were finally met. Monetary and political authorities of the leading countries have moved from words to deeds and one by one announced large-scale measures to stimulate the global economy.
First, at the meeting on 6 September (2.5 years after the beginning of the crisis), the ECB uncovered a powerful weapon to combat the debt crisis in the eurozone. It was decided to start the programme OMT (Outright Monetary Transactions), under which the ECB will buy bonds of the eurozone countries from the market without limiting the scope for controlling the level of market rates.
Just a week later, at the FRS meeting on 13 September, it made the move QE3. Also, at this meeting it was decided to extend the period of zero rates from 2014 to mid-2015. Under the new programme of quantitative easing, the FRS will buy mortgage-backed bonds (MBS) for $40 billion per month, without limits on the terms of purchases.
They were suddenly joined by the Bank of Japan, which also expanded the programme of purchasing government bonds from the market.
Finally, the Chinese government announced a large-scale investment in infrastructure projects in the country.
All these measures, which have been more aggressive than expected, caused a powerful surge of optimism among market participants and boosted growth of almost all risky assets. However, macroeconomic reports published in September on the state of the economies of major countries, especially Germany, the US and China, which are still not giving the signals of the global economic recovery, threw cold water on investors, which led to the consolidation of the market in the second half of the month. Nevertheless, the world's major stock markets were able to show good index growth for the month.
The bond market in developing countries also was encouraged by the new measures of the ECB and the FRS and continued the already impressive rally, again showing an increase in prices. As in the previous month, the greatest demand was for high-yield bonds. Bonds with a high investment grade, and therefore, a lower yield, showed under performance due to increased inflation expectations.