Major US indices closed last week in positive territory. They managed to snap a three-week losing streak. Markets were "oversold" and such a rise is no surprise. Despite the positive week, investors remain worried about the possibility of a recession, high inflation and of course, the tightening of monetary policy. Retail investor sentiment fell to a 7-week low and remains below historical averages for the 30th consecutive week. An interesting fact is that the S&P500 has achieved consecutive declines of more than 5%, which has happened 7 times since World War II until now. After such streaks leading to a strong sell-off, stocks have been able to recover at a good pace.

Against the backdrop of global challenges, not only developed but also emerging markets managed to end the week on green territory. The situation surrounding Covid-19 continues to improve slightly in China. However, the spread of the virus and China's aggressive measures remain a sensitive topic that investors are watching closely.

Bonds

The Bloomberg Aggregate Bond Index also ended the week higher, snapping 3 straight weeks of losses. The increase is due to the decrease in the yield of the 10-year bonds, it returned to the gravity zone around 3% - 3.2%. High yield corporate bonds underperformed and remained negative. The restrictive monetary policy is taking its toll on fixed income instruments and with that they have registered their worst start in over 50 years.

Raw materials

Crude oil and natural gas retreated again despite lower global inventory levels. That being said, fundamental indicators appear to remain positive towards energy investors. Amid strong demand related to the summer travel season, gasoline inventories are currently at eight-year lows. In addition, the base metals gold, silver and copper finished lower again this week. The correction in commodities can be interpreted as an early indication that an economic slowdown is on the horizon, but such reasoning should not be fully embraced just yet.

Investors' focus this week will be on statements from three central banks from Europe, UK, US on Wednesday.

✔ If you are interested in the investment opportunities which Compass Invest JSC can provide to you, please contact us for a free financial consultation according to your personal financial situation here - https://bit.ly/3MnaV1K

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, 19 George Washington Str, floor 2, 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.

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;

Additional information for the risks can be found in the Prospectus of the respective fund, which is available here: www.compass-invest.eu