Postbank

The investment objective of the Sub-Fund is to invest its assets primarily in equity securities and other equivalent securities of companies admitted to an Official Listing or dealt in, on a Regulated Market in developed countries of Europe, USA and Asia.

During the fourth quarter of 2024, US stocks climbed after Donald Trump won the presidential election, while markets in other regions faced challenges due to concerns about trade tariffs. The US market benefited from Donald Trump’s presidential election win and the Republican control of Congress, due to optimism surrounding Trump’s policies, prospects for economic growth, tax cuts, and deregulation. The Federal Reserve reduced interest rates by 25 basis points in both November and December. However, a December announcement scaling back the expected rate cuts for 2025 due to stubbornly high inflation. European equities fell during Q4, weighed down by recession fears and political turbulence in France and Germany. Concerns about potential trade wars following Donald Trump's election win also pressured the market. The European Central Bank (ECB) reduced interest rates by 25 basis points in both October and December. ECB President Christine Lagarde indicated that further cuts are likely in 2025, citing weak economic growth in the region. In Germany, new elections set to take place in February 2025. In France, parliamentary elections barred until July. In Japan, equities delivered gains in the fourth quarter, as market movements were heavily influenced by the US developments and their effects on exchange rates. Yen weakness towards the end of 2024 bolstered the earnings outlook for large-cap exporters. The potential implications of a second Trump presidency remain uncertain, however. Corporate governance reforms continue, and the Tokyo Stock Exchange highlighted best practices and areas for improvement. The Bank of Japan (BOJ) decided not to raise interest rates at its December policy meeting.

In the US, the Fund increased substantially its total exposure to significantly higher levels at the beginning of the fourth quarter in anticipation of the outcome of the US presidential election and maintained this higher exposure for the remainder of the quarter. The Fund also increased its exposure to the banking sector as the existing environment of robust growth, a steepening yield curve and a relaxation of certain regulations were expected to bode well for the sector. The Fund increased its exposure to the technology sector as well. The Fund on the other hand decreased its exposure to certain interest rate sensitive names, such as homebuilders. The appreciation of the USD v. the EUR further enhanced the Fund’s performance in euro terms. In Europe, the Fund gradually decreased its total exposure during the first two months of the final quarter of the year. The Fund mostly sold across the board, lowering its total exposure to Eurozone equities across sectors. Eurozone shares declined in the fourth quarter amid concerns over slowing growth or even outright recession. Further, political instability mainly in France but also Germany negatively impacted investor confidence. Towards the end of the quarter, though, the Fund increased its exposure to Eurozone equities substantially as many of the negative outcomes appeared to be already reflected in the stock prices. Lastly, in Japan the Fund maintained its overall investment level broadly stable at neutral levels. The Fund did though decrease its broad exposure to increase its exposure to the banking sector specifically. The stocks in the banking sector did indeed outperform the broader market, benefiting the Fund’s performance.