After taking a breather until mid-May, the global stock markets stepped on the gas again. The main focus of investors continues to be on inflation and interest rate developments: While heightened inflation expectations dominated in the first half of the quarter, the view that the economy is not threatened by imminent overheating increasingly prevailed in June. This was not least due to the COVID mutations circulating, which were able to dampen the economic outlook a little. The communication of the central banks, which spoke of temporarily increased inflation, also contributed to the fact that the interest rate curves did not shift any further upwards or even decreased somewhat (e.g. in the USD). These circumstances meant that growth stocks performed particularly well. The strong performance was accompanied by declining risk indicators.
This is a market environment in which our risk-based strategies are generally unable to keep pace with the capital-weighted benchmark. Unfortunately, this was also the case in Q2. Until the middle of the quarter, our equity world funds were virtually on a par with their respective benchmarks, but the strong market development in June then led to an underperformance in the final accounts.
Most of the major currencies depreciated against the CHF in Q2. As a result, the hedged fund classes ended the quarter better than the unhedged classes.