The smart portfolios of Across have brought double-digit valuation in 2017.
The December results of the smart portfolios are showing who the winners are. These are the stock markets that were most significantly boosted by the approved tax agenda of US president D. Trump, the raising of interest rates in the US and gradual phase-out of quantitative easing by central banks and the ECB’s positive outlook on the performance of the European economy. On the other hand, this development in the financial environment causes wrinkles for investors with debt vehicles, for whom the outlook is getting bleaker.
Our smart portfolio AIP 100+ (a purely stock-based solution) increased its value by 1.46% on the previous month, and for the whole year 2017 totalled 14.22%. Our AIP 50+ (a solution with 50/50 bond/stock proportion) strengthened by 0.81% in December, while the full-year increase reached 8.28%, while AIP 75+ brought home 1.13%, and 11.22% in total. Our smart solutions posted the highest values in their whole existence. Among the components of the respective portfolios, we should perhaps mention the performance of the December leader, iShares Core MSCI Pacific ex. Japan, with 2.46% in a single month. Overall, year 2017 belonged to the developing markets, covered in the Across smart solutions by the Amundi MSCI Emerging Markets index fund with euro performance exceeding 20%.
Across Bond+ confirmed its dominant position
Central banks are preparing increasingly difficult conditions for stakeholders in the bond investment market that are mainly related to renewed measures leading to more stringent currency policies. Less and less liquidity gets into the market, as the banks are reducing the volumes of their direct purchases. The players in the debt market therefore accumulate cash, enabling them to get their planned investments to more advantageous positions. Bonds with a floating rate and shorter duration are getting increasingly to the forefront. Considering the fact that the valuation of state bonds often falls below zero and generates negative value, more investment opportunities can be found in the corporate sector, while the issuers from the developing economies still have to offer bond revenues, including higher risk margins.
Across Bond+ also achieved a positive valuation in December and in 2017, as it brought investors total revenue of 9.15%. It outperformed its strongest competitors by more than 4.2%, with the average head-start of as much as 7.4%. During the year, fund managers managed to exploit the potential of Ukraine and the companies form beyond the Caucasus. The portfolio now also includes banking institutions from the former Soviet republics, and the fund successfully managed to restructure the debt instruments of issuers from the Balkans. Since its founding in 2015, the fund has achieved an average valuation of 6.09%, making it the second highest performer among all the funds focusing on debts of Central and Eastern European countries.
Performance of cryptocurrencies knows no limits, yet
It is already becoming a rule of a thumb that the strategies of Across Opportunities are dominated by cryptocurrencies. Index-based solutions copying Bitcoin and Ethereum grew by 46% and 75.5%, respectively, in December alone. Bitcoin Tracker increased by 1,221% in 2017(!), figures that are difficult to imagine for more traditional assets. Both Bitcoin and Ethereum still have a huge potential which, however, will be tamed by the regulators and other financial authorities (including those with taxation on their agenda) in the upcoming months. Looking at other strategies, let us mention Berkshire Hathaway, the company of the ‘Omaha Oracle’ Warren Buffett. It posted an increase of 2.7% only in December while for the year 2017 as a whole, it grew by respectable 21.62%.
Guaranteed products from Across hit the bullseye
Across Protected CZK+, a tailor-made solution aiming at the development of the euro/Czech koruna currency pair, is starting to bear fruit. The Czech currency is fluctuating in the calm waters deep below the level of 27 koruna per euro, guaranteeing the holders of the investment certificate a decent revenue of 8% per year. The most recent coupon was paid out in December.
The development in the crude oil market is favourable for Protected Crude Oil+, one of the guaranteed products by Across. Thanks to the keeping of agreements between OPEC and Russia, American WTI crude oil remains above 60 US dollars per barrel. Investors can enjoy a relatively strong certainty that in March 2018 the condition for payment of an 8-percent coupon will be fulfilled again, just like in March 2017.
Africa as the leader in index funds
The leader in the offer of funds in our Across Crème de la Crème portfolio is again the db x-trackers MSCI Africa TOP 50 Index (USD), with an increase of 6.38% on the previous month. With annual performance reaching 25.51%, it made it into the top three index funds in 2017. However, the clear winner is the Global X Robotics & Artificial Intelligence fund, which soared by 58.07%. The silver medal position, with a performance of 36.2%, belongs to the rookie in our offer – iShares MSCI Frontier 100 – a fund combining developing economies that do not yet rank among the large economic players. For a third consecutive month, index funds of bond-based solutions are on the defensive. However, there is some good news on the financial markets, as the European stock funds joined their US counterparts in the robust December performance.
Across Crème de la Crème represents a selection of more than 4,000 index funds from all over the world. In our selection, we mainly consider the administration costs of the fund, the reference currency, the method of copying as well as the deviation from the underlying index. Other criteria include frequency of dividend payment, currency securing, the size of the fund and its market liquidity.