August was a month full of events for investors

Sep. 09, 2024

August was a month full of events for investors. The release of weaker-than-expected economic data in the U.S., combined with the interest rate hike by the Bank of Japan, triggered a sharp sell-off in global equity markets early in the month. However, by the end of August, the market had recovered, supported by investors' expectations for more aggressive easing by the Federal Reserve (Fed). The major U.S. market indices, S&P 500 and NASDAQ 100, ended the month with gains, recording increases of 2.28% and 0.65%, respectively. The strong performance of U.S. equities was further bolstered by robust corporate earnings outside the technology sector. Despite the positive performance, in Europe the benchmark Euro Stoxx 50 index underperformed its U.S. counterparts, posting a gain of 1.75% for the month. This underperformance can be attributed to relatively weaker economic data and disappointing results from so-called "cyclical" companies.

July's U.S. manufacturing data fell significantly short of expectations (46.8 vs. 48.8), while weaker labor market data during the month heightened recession fears. Moreover, due to a higher labor force participation rate, the unemployment rate slightly increased to 4.30%. This, in turn, supported the strong performance of bonds, with the Bloomberg Global Aggregate Index rising by 2.80% for the month, as weaker economic data and cooling inflation bolstered the case for a rate cut by the Fed at its upcoming September meeting. The latest macroeconomic data led investors to anticipate a more aggressive reduction in key interest rates by the Fed compared to expectations for the ECB. Consequently, this contributed to a significantly better performance of U.S. Treasuries compared to German government bonds, yielding returns of 1.30% and 0.50%, respectively. The month was also strong for investment-grade corporate bonds, supported by both lower benchmark risk-free yields and narrower spreads.

Despite the volatility, August was a good month for well-diversified investors, as both equity and fixed-income markets delivered positive returns.

Despite the growing expectations of a recession in the U.S. and Europe, such expectations at this stage seem exaggerated. Therefore, upcoming macroeconomic data in the U.S. and Europe will be crucial in determining monetary policies. In this environment, diversification across different asset classes is essential for managing investment portfolios effectively.

MF “Compass Global Trends”

PERFORMANCE
MF “Compass Global Trends” ended the month with a price per share of BGN 1.7865, an increase of 1.29% for the month and an increase of 17.09% compared to the beginning of the year.

NAV per share for the month of August

MF “Compass Euro Bonds”

PERFORMANCE

MF “Compass Euro Bonds” ended the month with a net asset value per share of EUR 0.9107.

NAV per share for the month of August

MF “Compass Funds Select-21“

PERFORMANCE

MF “Compass Funds Select-21“ended the month with price of a single share of BGN 1.0673, which accounts for growth of 0.66% for the month and growth of 6.77% compared to the beginning of the year.

NAV per share for the month of August

Explore the detailed performance of MF 'Compass Global Trends,' MF 'Compass Euro Bonds,' and MF 'Compass Funds Select-21' for August, and gain insights into the developments in global financial markets and the management's expectations HERE

Disclaimer:

This information is marketing material and does not present investment consultation, advice, investment research, or investment recommendation. The information is valid as of the issue date of the marketing material and may alter in the future. The value of the units in the collective investment schemes changes over time and it could be higher or lower from the value at the time of the investment. No profits are guaranteed and risk exists for the investors to not receive the full amount of their investments. Investments are not guaranteed by a guarantee fund which is created by the country or another form of guarantee. Information on the performance of the financial instruments in the past is not a reliable indicator for future performance. Therefore, it is recommended for investors to acquaint themselves with the Prospectus and the Document with key information for investors before making a final investment decision. You can find these documents in Bulgarian on the website of Compass Invest - www.compass-invest.eu, and you can request and get a free paper copy at the office of the management company at: Sofia, 36 Alabin Str, floor 4, during every business day from 9 am to 5 pm. Future results are subject to taxation, which depends on the personal situation of each investor and may change in the future. A summary of the rights of the investors is available at the following hyperlink in Bulgarian: here. The mutual funds, which are managed by Compass Invest, are actively managed without following an index. We would like to inform you that Management Company Compass Invest can make a decision to terminate the offering of funds on the territory of the Republic of Bulgaria. The investment in units of mutual funds, in addition to benefits, carries certain risks like: liquid, operational, interest, currency, and political risk, as well as macroeconomical risk, currency risk, concentration risk, etc. The full information about risks can be found in the Prospectus of the respective fund.

Information about the expenses:

*This is the maximum amount, that can be withheld from the provided sum before it’s investing, respectively before the revenue is paid. The listed fees are included in the announced prices for the purchase and redemption of shares. The investor can get information about the current fees from their financial advisor.

** These fees are used for covering the management expenses of the fund, including the expenses for the offering of shares and marketing These expenses reduce the potential growth of the investment as they can have an effect on the profitability. Current expenses include the remuneration of the management company, the depositary bank, fees from Central Depositary JSC, Financial Supervision Commission, etc.

Risks:

Despite benefits, the investment in shares of mutual funds brings certain risks like:

1) Market risk with the following components: a) interest risk related to a decrease of the value of the investment due to a change of the interest rates levels b) currency risk related to a decrease of the value of the investment, denominated in a currency which is different from BGN and EUR c) price risk related to a decrease of the value of the investment in the case of unfavorable changes of the market’s prices;

2) Credit risk – related to a decrease of the value of the position in the case of unexpected events with a credit nature which are related to the issuers of financial instruments, the counter side of exchange and OTC transactions, as well as countries, in which they operate;

3) Operational risk – from errors or flaws in the system of the organization

4) Liquidity risk – in case of forced sales of assets under unfavorable market conditions;

5) Concentration risk – in case of incorrect diversification of exposures to groups of related clients, from the same economic branch, geographic area, etc.

6) Position risk which is related to the change of price of a certain instrument in result of factors related to the issuer or in case of a derivative instrument – related to the issuer of the base instrument;

All news Next news