Investment approach

The FMM-Fonds is an investment concept which is managed independently of any benchmark with the effect of an optimized chance/risk ratio. The basis is the three-dimensional FMM-method, which was developed by Dr. Jens Ehrhardt and has been proven for over 45 years. This approach not only takes into account (F)undamental factors like micro- and macroeconomic data for corporations and economies, but also (M)onetary and technical (M)arket aspects, which are often neglected by other fund managers. Fundamental factors play a more important role in the long-term strategic orientation of the portfolio than, for example, technical market factors, which are of particular significance to the fund’s short-term, tactical positioning. In normal market phases, the FMM-Fonds focuses on current trends. In extreme situations (such as euphoric moods on the market), the main factors influencing trends can be countered with an anticyclical investment strategy.

Monthly Commentary

April was a difficult month for the stock markets. A whole range of risk factors weighed on the stock markets: the war in Ukraine and fears of further escalation weighed on sentiment and increased investor pessimism. Energy prices remained at a high level, but did not rise much further, mainly because demand from China's manufacturing industry declined significantly. In addition, the lockdown in Shanghai caused a traffic jam in the busiest container port, which further strained the already tight global supply chains. Thus, price pressure on energy, many commodities and food remained high. Inflation rose to 8.5% in the US (in March) and 7.5% in the euro area compared to the same month last year, increasing pressure on central banks to raise key interest rates. High interest rate expectations and growing government debt weighed on the bond market. Interest rates on ten-year German government bonds rose from 0.55% to 0.94%, and their US counterparts yielded 59 basis points higher at 2.93% as of the end of April. In this market environment the price of the FMM Fund corrected -1.63%. Its benchmark index, the MSCI World, fell -3.81%. On the international stock markets, about one third of the sectors performed positively in April. The highest gains were recorded by the sectors food & beverage and personal care & pharmaceuticals. The sectors energy, utilities and healthcare also achieved positive results. The other sectors, however, suffered losses in April. The sectors media, technology, automotive, financial services and retail suffered the largest declines. At the individual stock level the fund benefited in April primarily from the good results of the Danish pharmaceutical company Novo Nordisk, the Swiss food company Nestlé, the Essen-based energy supplier RWE and the Finnish financial group Nordea Bank. On the other hand, negative impulses came mainly from the two US companies Alphabet (internet services; parent company of Google) and Quanta Services (provider of infrastructure solutions for energy supply and oil and natural gas companies) as well as the Essen-based energy supplier E.ON. During the month the fund management reduced the technology sector in particular. On the other hand it increased various sectors, including healthcare, insurance, utilities, telecommunications, food & beverages and credit institutions. Regionally the allocation of the USA was reduced while the share of German and Canadian stocks was increased. The equity ratio rose from 62.80% previous month to 65.52%. The bond quota remained almost stable at 15.39% (15.88% previous month). Liquidity amounted to 19.09% after 21.31%.

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