Bond market outlook
Outperformance of corporate bonds
Falling yield spreads and consequently rising prices led to an excellent performance of corporate bonds and Emerging Market bonds (in hard currency) in 2024, as expected. For 2025, however, the scope for further declines in yield spreads is very limited, offering little prospect for sustainable further price increases in these segments. However, the environment should remain supportive for these bond classes in 2025 (no recession, falling interest rates). The current yield spread of these bonds is sufficient to deliver significantly better performance than "risk-free" government bonds, even in a sideways market in 2025.
We are underweight in very long-term (German) government bonds: the yield level here is already very low again and sufficiently prices in interest rate cuts, so we prefer to avoid the high price volatility of these bonds at present.
Additionally, we remain overweight in Italian and French government bonds within Eurozone government bonds.
Find here more information on current market developments!
As of January 2025
Bond markets in detail
Rosy prospects for corporate bonds
Bonds undoubtedly had an extremely difficult year in 2022, so many investors had even higher hopes for a positive trend in 2023. And, as it happens, bond investments have indeed gained in value since the start of the year. But what do the next twelve months have in store?
Positive long-term outlook for Emerging Market bonds
In the wake of the rise in US bond yields, Emerging Market bonds have also come under increased pressure since the summer. They had delivered quite attractive performance up until then and offer solid risk-return profiles at the current levels, provided they are selected carefully.
A good time to enter the high yield bond market?
High yield bonds (i.e. bonds from issuers with lower ratings, thus making them riskier) have been a sought-after investment instrument for a long time. And they appear to offer very attractive returns at the moment as well. Is it the right time for an investment in high yield bonds?
Bond funds
Bond management is one of Raiffeisen Capital Management's longest established core competencies.
Raiffeisen-ESG-Global-Rent: Invest sustainably across the world
Bond investments have enjoyed modest-to-good value growth since the turn of the year, thanks mainly to a significant renewed rise in interest income. But what might happen over the next twelve months, and what are our predictions for the global bond markets?
Raiffeisen-Nachhaltigkeit-Rent: No need to fear the interest rate turnaround
It has frequently been a topic of discussion for years now, sometimes as a source of hope and sometimes as a cause for concern: the “interest rate lift-off”. Now it is finally here and has resulted in massive price and yield movements. Raiffeisen-Nachhaltigkeit-Rent seeks out and takes advantage of opportunities even on these turbulent bond markets.
ESG-transformation of the Emerging Market bond markets
The Emerging Markets present a number of major challenges for investors when it comes to sustainability and ESG-criteria. However, understanding and overcoming these challenges also opens up significant opportunities, both in terms of earnings and promoting a transition to sustainable business practices in the Emerging Markets.
Sustainability competence meets bond expertise
Raiffeisen-Euro-Corporates is going sustainable as of 19 September 2022, because the fund will take ESG criteria into consideration starting on this date. There are many good reasons to add sustainability criteria to the decision-making process – including from a risk-return perspective. At the same time, the massive yield increases that have been seen recently open up new return opportunities for investors.
The investment strategy permits the Raiffeisen-Nachhaltigkeit-Rent to predominantly (relative to the associated risk) invest in derivatives.
As part of the investment strategy, starting six months before the end of the term, the Management Company is permitted to invest primarily in demand deposits or deposits with the right to be withdrawn.
The Fund Regulations of Raiffeisen-Inflationsschutz-Anleihen, Raiffeisen-Nachhaltigkeit-Rent, and Raiffeisen-ESG-Global-Rent have been approved by the FMA. The Raiffeisen-Inflationsschutz-Anleihen may invest more than 35% of the fund's volume in securities/money market instruments of the following issuers: France, Netherlands, Austria, Belgium, Finland, Germany. The Raiffeisen-Nachhaltigkeit-Rent may invest more than 35% of the fund's volume in securities/money market instruments of the following issuers: France, Netherlands, Austria, Italy, United Kingdom, Sweden, Switzerland, Spain, Belgium, United States, Canada, Japan, Australia, Finland, Germany. The Raiffeisen ESG Global Bonds may invest more than 35% of the fund's volume in securities/money market instruments of the following issuers: United States, Japan, Germany, France, United Kingdom.
The following assessments of capital market prospects are a snapshot and may change at any time without notice or update. They represent a basic orientation framework and do not represent a generally binding view for fund and portfolio management. They also represent neither a binding forecast nor a recommendation for action for investors. The assessments of individual teams or fund managers may deviate significantly from this under certain circumstances. Similarly, the positioning of the investment funds, asset management products and portfolios may differ significantly from the market outlook mentioned on this page, for example due to different investment horizons, strategies and models used or discretionary decisions made by individual fund managers.
As of November 2024