FROM European UC Sectors Rotation Strategies Index it is relatively strong now. While most of the leading indices have experienced double-digit declines since the beginning of the year, sector rotation has a slight upside. The index gained a defensive orientation that had lasted for months. The composition of the index is determined by ifo business expectations and the market trend.
The ifo index is a good indicator of mood. There are three elements: climate, location and expectations. 9,000 companies from the manufacturing, commercial and service sectors take part in the monthly ifo research. Following a sharp decline in ifo business expectations in March 2022, the index has rebounded slightly in the past two months. “On 24.6. the results of the June survey were published. There is definitely a chance that ifo’s business expectations will increase slightly again. This would rebalance the European UC sector rotation index, ”explains Christian Stocker, Equity Strategist at UniCredit.
The composition of the European UC Sector Rotation Strategy Index is constantly adapted to the current economic and stock market changes. Put simply, it works like this: if ifo’s business expectations are pointing to an economic recovery, cyclical sectors are the first choice. If they signal a slowdown, demand for defensive sectors. The ifo business expectation therefore defines 50 percent of the composition of the UC’s European Index of Sector Rotation Strategies. For the remaining 50 percent, the basket with the best performances in the last three months is selected from the three areas “basket of cyclical sectors”, “basket of defensive sectors” and “general market”. The UC European Sector Rotation Strategy Index is currently 100 percent defensive. “Ifo’s business expectations have increased twice in a row recently. If the value for June is above May’s level, 50 percent of the index composition will shift from a defensive basket to a cyclical one, Stocker says. Stocker doesn’t want to get involved in the market trend just yet, but here too, a change is possible.
Thanks to the HVB Open End index certificate, investors can participate individually in the index performance. The price development of the UC European Index of Sector Rotation Strategies is impressive.
Chart: Index of CU European Sectors Rotation Strategies
Period of observation: 02/06/2017 – 01/06/2022. Historical observations are not reliable indicators of future events Source: Thomson Reuters
Products listed in the UC European Sector Rotation Strategy Index to Invest in Index Growth
|Essential||Product type||WKN||Sale price in EUR||annual fee||repayment date|
|European UC Sectors Rotation Strategies Index||index certificate||HVB12Y||1863.97||1.35%||open end ****|
|European Amundi Sector Rotation Funds||fund||A2N75U||140.79 **||1.05%||open end|
|European UC Sectors Rotation Strategies Index||Step Invest certificate *||HVB6QN *||1,030.00 ***||–||02/06/2026|
|Rotation Risk Control of the European UC Sector||Guarantee Certificate 05/2027 from UniCredit SpA||IT0005491979 *||1,025.00 **||–||04/28/2027|
* by subscription until June 30, 2022 (subject to early closure); ** The rate as of May 30, 2022; *** Issue price; **** Annual purchase right of the issuer; Source: HypoVereinsbank onemarkets; 01/06/2022; 10:00
Other interesting investment products based on the UC European Sector Rotation Strategy Index and other underlying assets can be found on our website onemarkets.de.
Please note important information and disclaimer.
This information does not constitute investment advice, but an advertisement. The public offering is made solely on the basis of a securities prospectus approved by the Federal Financial Supervisory Authority (“BaFin”). The approval of the prospectus should not be interpreted as a recommendation to buy these securities from UniCredit Bank AG. The prospectus containing all supplements and final terms are authoritative only. It is recommended that you read these documents carefully before making any investment decision in order to fully understand the potential risks and opportunities involved in making an investment decision. You are about to buy a product that is not simple and may be difficult to understand.
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The contribution to sector rotation clearly exceeds the DAX! it first appeared on the onemarkets blog (HypoVereinsbank – UniCredit Bank AG).
Author: Richard Pathenhauer