Postbank

The investment objective of the Sub-Fund is to invest its assets primarily in transferable debt securities (mainly Sovereign and investment grade corporate bonds, denominated in Euro, USD and other major currencies), issued in Europe and North America, admitted to an Official Listing or dealt in on a Regulated Market worldwide. Secondarily the Sub-Fund may invest up to 15% of its net assets in sovereign and investment grade corporate bonds in other world markets. Emerging markets currency exposures is limited to 15% of the Sub- Fund’s net assets. The Sub-Fund may invest up to 10% of its net assets in mortgage-backed securities and asset-backed securities. Additionally, the Sub- Fund invests in bank deposits, and money market instruments, of European banks and major corporates. The Sub-Fund can also invest in structured financial instruments, as well as in financial derivative instruments for the purposes of efficient portfolio management or hedging.

Major central banks continued their interest rate cuts. ECB cut rates two consecutive times by 25bps at its 2 meetings in Q1 2025. Fed did not make any rate-cut in Q1. Yields rose slightly, contrary to the marginal retracement of the spreads.

The sub-fund continued to receive substantial inflows this quarter too. We have maintained an overweight stance regarding the government portion of the portfolio compared to the targeted segment of the market, throughout the quarter. Whereas the corporate part was substantially underweight at the beginning of the year, we closed the gap, leveling the exposure in February. The portfolio duration of the sub-fund increased from 3.80 to 4.28 by the end of March. The increase was due to the enhanced exposure to the government sector via both cash securities and derivatives.