Strategic Income
Outlook 2019

Strategic Income Fund invests mainly into income-oriented assets in the US and international markets as well. Last year the big challenge was the FED policy of increasing interest rates. In February our investment strategy turned to risk off. We realized a little loss and stayed invested secure in the money market with the US-Dollars paying some interest. In October we have got from our system a buy signal, bringing us back to the market fully invested. Regrettably the markets turned shortly after that again to the negative and we have got a new sell signal in November which brought us back to the secure money market investment and we could avoid the big drop during November and December. Nevertheless, we increased our negative annual result and showed the worst performance during the last 25 years of that strategy with minus 4,88 % for 2018. Only two negative years for this strategy in 25 years. 2018 was one of those.

In January we have got a new buy signal. The fund is fully invested und participates from the positive start of the markets this year. We are confident that 2019 will continue to show positive results and will follow the good results of the past.

The EUR share classes suffer from high hedging costs for the currency hedging because the interest rate difference between the USD and the EUR is very high right now. Notably, that has big influence on the costs of currency hedging for our EUR share classes. On the other hand, this hedging strategy is a security if the USD would weaken against EUR. In 2017 this was very helpful. 2018 the results would have been better without a hedge. As the forecasts for the USD development in 2019 are more or less negative, we believe that this year the hedging of the currency for EUR investors should bring added value.