Market Update: 2023 A Wonderful Year for Investors

• Higher Prices in December, 2023 Marked a Splendid Year
• Investors Anticipate Interest Rate Reductions in 2024
• Bitcoin and Ethereum Show Significant Gains

Higher Prices in December, 2023 Marked a Splendid Year

In November, market prices experienced a strong upward trend, and this optimistic trend continued in December. Both stock and bond returns were highly positive, with all four Peaks portfolios increasing in value by approximately +3.5%.

As a result, the Peaks portfolios ultimately concluded the volatile year of 2023 with impressive returns: from +11.3% (after deducting costs) for Cautious to +18.5% for Adventurous!

This represents a significant recovery from the losses of 2022 when the portfolios suffered a decline in value due to the war in Ukraine, high energy costs, and inflation.

Table 1: Net returns of the Peaks portfolios

Peaks portfolio	Return December	Return 2023	Average yearly return since start of Peaks	Return since start of Peaks
Cautious	3.5%	11.3%	2.2%	14.0%
Balanced	3.5%	13.6%	4.3%	29.1%
Ambitious	3.5%	16.1%	6.5%	45.8%
Adventurous	3.6%	18.5%	8.5%	63.6%

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 If you have deposited or withdrawn money this month, your personal return will differ from the figures shown above.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.

 Table 2: Risk of the four Peaks portfolios

Risk (volatility)	December	2023	Average annualized volatility since start of Peaks
Cautious	3.8%	5.0%	5.7%
Balanced	3.9%	5.9%	7.6%
Ambitious	4.5%	7.4%	10.0%
Adventurous	5.4%	9.1%	12.5%

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.

Investors Anticipate Interest Rate Reductions in 2024

The positive sentiment in the stock and bond markets stems from investors' expectations that central banks, such as the American Federal Reserve (FED) and the European Central Bank (ECB), will lower interest rates in 2024. Interest rate reductions are positive for the economy, making it cheaper for companies and consumers to borrow money and more attractive to invest rather than save.

Keep in mind that these are expectations, and it is uncertain whether these interest rate cuts will actually be implemented. If they happen as expected (or better), it will be positive. However, if during the year it becomes apparent that central banks are lowering rates less quickly or less aggressively, investors may be disappointed, potentially leading to (temporary) price declines. The exact outcome remains to be seen!

Bitcoin and Ethereum Show Significant Gains

Last week, the U.S. Securities & Exchange Commission (SEC), the regulator of U.S. capital markets, approved the launch of several crypto index funds. This means that professional investment houses in the U.S. can now introduce their own crypto ETFs. This was not allowed in the United States before, but it was already permitted in Europe.

Leading up to the SEC's decision, the prices of Bitcoin and Ethereum rose significantly as investors expected that crypto investments would now be more widely accepted, leading to increased investment.

At Peaks, you could already invest in Bitcoin and Ethereum through two ETPs (Exchange Traded Products) approved by European regulators and listed on a regular stock exchange. More about investing in cryptos (and the associated risks) can be found here.

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

Equity funds	ISIN	December	2023	Return since start of Peaks
North America	LU0629460089	4.2%	28.7%	118.9%
Europe	IE00B52VJ196	3.4%	16.5%	57.6%
Asia Pacific	LU0629460832	3.8%	12.1%	27.0%
Emerging markets	IE00BYVJRP78	0.7%	-2.4%	11.0%
Obligaties
European Government bonds	IE00B4WXJJ64	3.6%	8.4%	-4.3%
European Corporate bonds	LU0484968812	3.1%	8.5%	-4.0%

Good to know: These are net yields of the index funds in which you invest with Peaks in November 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.