Last week the banking sector in US and Europe experienced some stress with events in Silicon Valley Bank, Signature Bank and Credit Suisse. In all cases, the deposits are fully guaranteed with their share prices absorbing the loss. As a result, the equity markets registered some mild losses while sovereign bonds and good quality corporate bonds experienced capital gains.
Although it is still early to fully assess the economic impact of those recent events, historical data suggests that equity and bond markets are negatively correlated in turbulent times. This offers stability in a balanced portfolio, whilst at the same time a long term investor stands to benefit from the short term market volatility.
The Hellenic Life Customer Funds do not have direct exposure to neither Silicon Valley Bank, Signature Bank nor Credit Suisse. There is minimal indirect equity exposure for Credit Suisse via participation in a basket of all major European Companies of 0,01% in the Hellenic Life Basic and Balanced Funds and 0,015% in the Hellenic Life Dynamic Fund.
As at 21st March 2023, the unit price for the Basic Fund observed positive performance of +1.38% compared to +0.56% as at the end of February, and similarly, the unit price of the Balanced Fund improved with portfolio positive performance of +2.74% compared to +2.64% as at the end of February. The unit price of the Hellenic Life Dynamic Fund experienced a small correction however it remains positive at +4.75% compared to +5.50 % as at the end of February.
We closely monitor all market developments, ready to react if necessary and adjust our portfolios allocation accordingly. Our objective remains to deliver high long-term investment return, while efficiently managing the market volatility.