Market Update June 2023: Artificial Intelligence brings optimism to the stock market

In this market update, you will find:

• Positive month for the Peaks portfolios
• Technology stocks rise thanks to artificial intelligence
• Japanese stocks on the rise

Positive month for the Peaks portfolios

As the summer temperatures return, so does the positive sentiment at the stock market. All four Peaks portfolios ended May in the green, with returns ranging from +1.0% to +2.1%. This also led to an increase in the overall year-to-date return.

Table 1: Net returns of the Peaks portfolios

Good to know: These are the net returns of the Peaks portfolios for the previous month, the year-to-date, and since the start of Peaks, after deducting Peaks’ fees, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.

The table above shows returns for a portfolio of €10,000. The returns do not take into account any deposits or withdrawals made during the month. If you have deposited or withdrawn money this month, your personal return will differ from the figures shown above. Additionally, your personal return will vary if you have invested less or more than €10,000 due to the monthly fixed costs charged by Peaks.

The volatility (risk) of the Peaks portfolios decreased in May compared to the previous month, while the stock market values increased. Volatility measures the fluctuations of a portfolio over a specific period. The higher the volatility, the stronger the fluctuations and the riskier the investment.

 Table 2: Risk of the four Peaks portfolios

Good to know: Here you can see the risk of the four Peaks portfolios over different time periods (last month, year-to-date, and average since the start of Peaks). Risk represents the annualized fluctuation in return and is also referred to as "volatility.". Risk is measured by calculating the standard deviation of the daily net returns of the Peaks portfolios and converting that number to an annual basis.

Technology stocks rise thanks to artificial intelligence

The performance of technology stocks was strong last month. Chatbots like ChatGPT have sparked a new trend in artificial intelligence (AI) at the stock market. This is mainly attributed to the rise of semiconductor stocks, particularly NVIDIA. The company not only develops its own AI solutions but also serves as a key supplier for AI, providing its powerful chips to other vendors. This resulted in a 28.55% increase in NVIDIA's stock over the past four weeks, positively impacting the performance of the North America Index Fund in which you invest with Peaks and which includes NVIDIA shares. The value of this index fund rose by 5% in May.

Japanese stocks on the rise

Japanese stocks also experienced an upward trend last month, as observed in the Asia-Pacific Index Fund in which you invest with Peaks. The index fund gained 2.7% in May, with Japanese companies accounting for 66.4% of its holdings. Furthermore, the Japanese stock index Nikkei reached its highest level since July 1990 at the beginning of last week. The performance is attributed to a combination of several events: Japanese chip companies benefiting from the AI euphoria, significant buying interest in Japanese stocks from Warren Buffett, and the settling of turbulence surrounding the Bank of Japan's policy reversal.

Table 3: Net yields of the index funds included in the Peaks portfolios

Good to know: These are net yields of the index funds in which you invest with Peaks in May 2023, for the entire year 2023, and since the start of Peaks, after deducting Peaks costs, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.

Investing always involves risks. Know that you could lose (a part of) your invested money.