The model portfolios have been constructed based on the VIG Investment Clock and our tactical asset allocation strategy, using following principles: we have selected 4–5 investment funds from our own range.
In all three currencies, the Conservative Portfolio targets a composition of 40% equities and 60% bonds, while the Dynamic Portfolio focuses on 60% equities and 40% bonds.
The key economic factors behind these allocations include global and regional economic trends, expectations of central bank interest rate cuts, and investor sentiment.
Conservative portfolio focuses more on stability and fixed income assets (bonds), whereas dynamic portfolios aim for higher-yield outlook, using the volatility of equities. ESG considerations remain important, particularly in emerging markets and mixed-asset funds.
Investment Approach
One effective way to achieve diversification is through exposure to Central European equity markets. In relative terms, regional equities are attractively priced compared to their profit-generating capacity. For instance, Poland’s average P/E ratio (price-to-earnings) stands at 11.4, Hungary’s at just 8.5, while the average for emerging markets approaches 14, and U.S. equities trade well above 20.
Momentum is also favorable for buyers: most regional stock exchanges reached new highs in October, reflecting strong buying pressure and sending a positive signal to investors. Overall, emerging market equities are considered attractive worldwide -both technically and fundamentally – with appealing valuations that continue to support investor interest.
With rate-cut expectations moderating, we now see less upside potential in the global and Central European bond markets than before. The U.S. Federal Reserve’s more restrictive policy shift and the decline in expectations for dollar rate cuts have also reduced the competitive edge of Central and Eastern European bonds, leading to a weaker outlook for the regional fixed-income segment.
VIG EUR Portfolios
Reflecting the optimistic mood among equity investors, we have adjusted the tactical allocation of our model portfolios. We have increased the weight of the VIG Active Beta Flexible Allocation Fund, which invests in the most popular U.S. and European equities while maintaining strong risk management.
At the same time, we have reduced the allocation to the VIG Developed Market Short Term Bond Investment Fund, as the global outlook for bond markets has weakened.
VIG USD Portfolios
We have made similar tactical allocation adjustments in the USD-based model portfolios, driven by the same market considerations. In line with this approach, we also implemented changes in the EUR-based model portfolios: we increased the weight of the VIG Active Beta Flexible Allocation Fund, which invests in the most popular U.S. and European equities while maintaining strong risk management practices.
Conversely, we reduced the allocation to the VIG Developed Market Short Term Bond Investment Fund, reflecting the weaker global outlook for bond markets.
Disclaimer
This is a distribution announcement. Detailed information is needed to make a well-founded investment decision. Please inform yourself thoroughly regarding the Fund’s investment policy, potential investment risks and distribution in the Fund’s key investment information, official prospectus and management regulations available at the Fund’s distribution outlets and on the Asset Management’s website (www.vigam.hu). The costs related to the distribution of the fund (buying, holding, selling) can be found in the fund’s management regulations and at the distribution outlets. Past returns do not predict future performance. Please note that in comparison with other investment funds, the return achieved may be affected by differences in the reference index and therefore the investment policy.
The future performance that can be achieved by investing may be subject to tax, and the tax and duty information relating to specific financial instruments and transactions can only be accurately assessed on the basis of the individual circumstances of each investor and may change in the future. It is the responsibility of the investor to inform himself about the tax liability and to make the decision within the limits of the law.
The information contained in this leaflet is for informational purposes only and does not constitute an investment recommendation, an offer or investment advice. VIG Asset Management Hungary Closed Company Limited by Shares accepts no liability for any investment decision made on the basis of this information and its consequences.
The Asset Management’s license number for managing alternative investment funds (AIFM) is: H-EN-III-6/2015. The Fund Manager’s license number for UCITS fund management (collective portfolio management) is: H-EN-III-101/2016.