Market Update September 2023: Peaks portfolios slightly down

In this stock market update, you will find:

• Yields drop slightly in August
• Interest rate increases slow down European economy
• Disappointing Chinese economic results

Yields drop slightly in August

August didn't bring scorching temperatures to Dutch shores, and similarly, the stock markets remained relatively cool. With the exception of the 'Cautious' portfolio, all Peaks portfolios saw a slight dip last month. However, when we consider the entire year of 2023, the returns of our four standard portfolios remain firmly in plus, with the 'Adventurous' portfolio leading at +13.1%.

Table 1: Net returns of the Peaks portfolios

Peaks portfolio	Return August	Return 2023	Average yearly return since start of Peaks	Return since start of Peaks
Cautious	0.3%	5.8%	1.4%
Balanced	-0.2%	8.2%	3.6%	23.2%
Ambitious	-0.6%	10.7%	5.9%	40.0%
Adventurous	-1.0%	13.1%	8.0%	57.7%

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 If you have deposited or withdrawn money this month, your personal return will differ from the figures shown above.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, or risk, of the Peaks portfolios remained relatively stable in August compared to July. Volatility measures how much a portfolio fluctuates over time, with higher volatility indicating greater fluctuations and a riskier investment.

 Table 2: Risk of the four Peaks portfolios

Risk (volatility)	August	2023	Average annualised volatility since start of Peaks
Cautious	4.6%	5.1%	5.8%
Balanced	5.2%	6.0%	7.8%
Ambitious	6.0%	7.5%	10.1%
Adventurous	6.8%	9.4%	12.7%

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.

Interest rate increases slow down European economy

Inflation remained a cause for concern for central banks in August. Early in the month, the European Central Bank (ECB) raised interest rates by an additional 0.25%, intentionally slowing down the growth of the European economy. This impact is noticeable in the performance of the 'Europe' index fund, which you are investing in through Peaks.

However, despite these efforts, inflation in the eurozone remained elevated at an average of 5.3%, still surpassing the ECB's target of "close but below 2%." During a meeting of central bankers at the Jackson Hole mountain resort in the United States, both the ECB and the US Federal Reserve hinted at the possibility of further interest rate increases. Whether that happens will become clear in the second week of September. If the ECB raises interest rates, the interest rate on the Peaks Interest Account will also go up. 

Disappointing Chinese economic results

One index fund had a notably negative performance last month: the 'Emerging Markets' fund saw a return of -6.6%. This was partly due to disappointing economic results in China, where both manufacturing and consumer spending growth fell short of expectations. Just the previous month, the 'Emerging Markets' index fund had achieved a return of +7.2%.

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

	ISIN	Return August	Return 2023	Total return since start of Peaks
Equity funds
North America	LU0629460089	0.7%	22.5%	108.3%
Europe	IE00B52VJ196	-2.6%	10.0%	48.8%
Asia Pacific	LU0629460832	-2.6%	4.8%	18.8%
Emerging markets	IE00BYVJRP78	-6.6%	-1.7%	11.9%
Bond funds
European Government bonds	IE00B4WXJJ64	1.4%	2.9%	-9.2%
European Corporate bonds	LU0484968812	1.5%	2.3%	-8.9%

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