Market update: March 2022

March was a turbulent month in the investment world. The market was volatile. This means that the value of investments moved up and down a lot and often. Sky-high oil prices and central banks adjusting interest rates were heavy punches for the market. Fortunately, in the end the prices were largely balanced. There were in fact also good developments. For example, the job market has not been this good in ages. The conclusion of March was clear: equities did better than bonds.

Best performing fund in March: Northern Trust World Custom ESG Equity Index Fund +3.72%

The investment update

At the beginning of March, mature markets, such as Europe and the United States, were hit hard by the Russian invasion of Ukraine. This price recovered somewhat in the course of the month. This was partly due to the expected increase in earnings from the technology, energy and commodities sectors, among others.

Emerging market equities struggled in March. This was partly due to the dip in the prices of Chinese equities, the number of increasing COVID infections in China and the ensuing lockdowns. Also, the US stock exchange may be delisting a number of Chinese stocks. This had a negative impact on share prices.

In the United States, the Federal Reserve, the central bank, raised interest rates for the first time in four years to combat inflation. This led to large movements in the prices of government bonds worldwide.

Money market yields in Europe remained on the low side. This is because, unlike the US central bank, the ECB has not yet adjusted interest rates.

Important factors for your investments in April

- Developments regarding the war in Ukraine

- The energy price

- Extended lockdowns and COVID measures in China

‍What does this mean for my plans?

The results in March prove the importance of diversification of investments. Vive's distribution of investments across six asset classes, with passive investment funds spread across different companies, countries and sectors, led to a positive result on average. Some portfolios experienced a slight decline. Given the market conditions, this is a good result. Medium- to long-term investing has periods in which there is no increase or even decrease in the value of portfolios. The longer your plan lasts, the less you need to worry about the monthly results.