Another negative month for the financial markets led to one of the worst first half of the year. The broad U.S. S&P 500 index fell with -20.6%. This is the weakest performance since 1970, when it fell with -21% in the first six months. Along with the decline in equity markets since the beginning of the year, we have also seen a decline in government bonds, considered a safe haven by investors.

In an attempt to deal with inflation, the leading central banks (Fed and ECB) continued the rhetoric of tightening monetary policy. The Fed continued to raise interest rates, announcing further hikes in the coming months. At the last meeting in June, rates were raised by 75 basis points – the last time such a large step was taken in one meeting, was registered in 1994. The ECB, although it has not yet started, has announced that it will start raising interest rates in July by 25 bp.

Higher interest rates have a negative impact on government bond prices and lead to lower stock valuations, and correspondingly lower growth forecasts for companies. Fears of high inflation have now been superseded by those of a recession driven by higher prices and higher interest rates. Amid the rising likelihood of a recession, analysts' forecasts for corporate earnings still point to positive growth this year and next. The possibility of these forecasts being revised downward creates the conditions for further declines in share prices.
 

Performance of MF Compass Global Trends
Mutual Fund Compass Global Trends finished the month with a price per unit of 1.1833 BGN, which is -6.78% for the month and -26.39% since the beginning of the year.

Price per unit of the fund for the period April 1 2014 – June 30 2022

 

Performance of MF Compass Euroselect
Mutual Fund Compass Euroselect finished the month with a price per unit of 0.8989 EUR, which is -3.57% for the month and -18.30% since the beginning of the year.

Price per unit of the fund for the period July 16 2018 – June 30 2022


 

Performance of MF Funds Select-21
Mutual Fund Compass Funds Select-21 finished the month with a price per unit of 0.9640 BGN, which is -3.04% for the month and -6.35% since the beginning of the year.

Price per unit of the fund for the period July 26 2018 – June 30 2022


Read more about the performance of Mutual Fund Compass Global Trends, Mutual Fund Compass Euroselect, and Mutual Fund Compass Funds Select-21 for June, and find out more about the development of the financial markets and the management expectations here.(BG)