Market update: April 2022

April was a difficult month for the markets. The S&P 500 fell by 8.8%, the worst month since March 2020. Rising costs for consumer goods, the war in Ukraine and the risk of a higher interest rate hike were all factors that affected the market.

But because Vive invests in different countries and sectors, we also benefited from positive movements. Most major technology companies posted good results in the first quarter. In addition, COVID cases continued to decline in Asia. That is good news for world trade and the holiday season. The Nasdaq 100 companies are now back to the level before the pandemic.

​Best fund performances in April 2022: Northern Trust Global High Yield ESG Bond Index (+0.7%)

Global High Yield performed better due to the devaluation of the Euro, while equities in developed markets declined.

‍The fund for developed countries had a difficult month. Here too, the war in Ukraine, rising interest rates and the risk of a minor recession played a major role. Companies like Netflix and Amazon underperformed due to poor results, but good results from companies like Apple and Microsoft partially offset these losses. The Euro fell ~5% against the USD. As a result, the Northern Trust World Custom ESG Equity Index Fund closed the month at -3.3%.

The emerging markets fund continued to struggle due to increasing COVID lockdowns in Chinese cities. Fortunately, the strong results of Samsung and TSMC, among others, partially compensated for these losses. The increasing demand for semiconductor chips also had a positive impact on the price.

The interest rate on 10-year government bonds has risen between 0.4% and 0.6% in most developed markets, such as the US and Germany. In two months, the interest rate on long-term bonds has risen by more than 1%. A big change thanks to market volatility. This increase continues to negatively affect bond funds. The 10-year interest rate is already at 3% in the US, but may be limited, which will likely allow the funds to recover.

The return on European money markets remains low. This is because the ECB does not (yet) want to raise short-term interest rates. In contrast to the Federal Reserve, which also contributes to the fact that the value of the Euro has fallen against the USD.

What does May have in store for us?

- Every step towards ending the war in Ukraine is essential to reduce the intense market movements.

- The outcome of the Federal Reserve meeting in early May will provide clarity on the further course of interest rates.

- The market closely monitors economic data to detect any signs of a recession, but potential positive effects will also be strongly endorsed.

What does this mean for my plans?

‍Don't let a bad month disrupt your plans. A well-diversified portfolio is the key to success in the long term. A broad portfolio such as the one Vive puts together will most likely show an upward trend in the long term, although there will be less favorable periods in between. Stay calm and keep investing.