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?

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.

The Eastern European bond markets have done surprisingly well this year. Does this mean that the story is already over, or does the region still have the potential to generate returns?

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?

Georg Nitzlader, head of the Fixed Income Team, discussed current trends on the bond markets and highlighted the increasing importance of ESG for these markets as well.

This bond fund was launched with the goal of generating attractive returns for investors with manageable levels of fluctuation and risks both in unusual environments such as this and in “normal” times.

Raiffeisen Capital Management’s new fixed-term fund, Raiffeisen-Mehrwert-ESG 2029, was launched in an environment that still remains attractive for bond investments.

Eastern European states exhibit a higher-than-average level of yields. This fosters hopes for price increases in the future, and in the fund Raiffeisen-Osteuropa-Rent, for example, it already results in interest of around six per cent.

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?

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.

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.

Raiffeisen Capital Management’s new, fixed-term fund, Raiffeisen-Mehrwert-ESG 2028 II, was starting up in an attractive yield environment, since tangible returns are now possible after many years of zero or negative interest rates. Another positive aspect is that the fund only invests in sustainable enterprises.

Linker funds have already proven their value as hedging instruments in periods of inflation. Börse-Express spoke to Alexandra Muchna, fund manager for Raiffeisen-Inflationsschutz-Anleihen, about exactly how and under which conditions they work.

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.