Investment approach

The asset managing fund pursues a portfolio combination of stocks and hedging strategies on the stock market. The aim of the strategy applied in the fund is to achieve a return that is adequate to the risk in the long term. The fund's assets are invested in listed shares and bonds of all kinds - including zero-coupon bonds and variable-interest securities, participation certificates of all kinds, and convertible and warrant bonds with warrants on securities - traded on a stock exchange or another regulated market that operates regularly, is recognized and open to the public. The Fund may use financial instruments whose value depends on the future prices of other assets ("derivatives") to hedge or increase the value of the assets.

Monthly Commentary

In October the international stock markets were able to compensate the losses of previous month and performed well with the exception of Japan, Korea and Brazil. The German DAX index gained 2.81% and the broad European index Stoxx Europe 600 rose 4.55%. The US S&P 500 index climbed 7.21% and Hong Kong's Hang Seng index also advanced 3.63%. Global equities, as measured by the MSCI World, gained 5.88% - all index data in euro terms. In October equity markets benefited from positive quarterly results in the US and Europe. In the US around three quarters of companies beat expectations, in Europe it was over two thirds. This and the prospect of an expected robust economy with normalizing inflation in the coming year brightened the mood on the markets. This was complemented by the expectation that the US Federal Reserve would only cautiously tighten the liquidity tap, while the European Central Bank would maintain its expansionary monetary policy. These factors were more important than concerns about continued supply bottlenecks and rising commodity prices, including oil, copper and wheat. Inflationary pressures therefore remained high for the time being. In the USA the inflation rate was 5.4% compared to the same month last year, in the euro area it was probably 4.1%. In Germany supply bottlenecks in particular weighed on the mood of the economy, as capacity utilization in industries is falling and rising prices in trade are causing pessimism. The German ifo Business Climate Index fell from 98.9 to 97.7 points, declining for the fourth month in a row. At sector level all industries in the MSCI World were able to develop positively with the exception of telecommunications. The sectors automotive, financial services and technology performed particularly well. In China the official Purchasing Managers' Index for manufacturing continued to decline, falling four basis points to 49.2. Its counterpart for services also fell, ending the month at 52.4. Here, too, the reasons are likely to be the rising commodity prices and the continuing uncertainty with regard to the further development of the Chinese real estate market. On the bond side, inflationary pressures and the expected reduction of liquidity in the USA caused interest rates to rise. 10-year German government bonds rose from -0.20% to -0.11%. Their US counterparts yielded 1.55%, 6 basis points higher than previous month. Gold was able to benefit somewhat from the ongoing inflation. The price for the troy ounce rose by around 1.7% to 1,789 US dollars The US dollar appreciated moderately against the euro from 0.864 to 0.865 euros.

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