What is an equity?
An equity is a financial instrument that makes investors co-owners of a company. Due to this co-ownership, one participates in the economic success or failure of a company. It is also associated with, for example, the right to dividends (profit distribution) or participation in the shareholders' meeting. The value of an equity depends on various factors, such as the financial situation of the company, the demand for its products or services and the general market situation.
This is, of course, a simplified explanation. There are also other factors to consider with equities (equity funds). For example, compared to other investments, a higher risk tolerance is required for equity investments.
In this case, it's good to be able to rely on experts. At Raiffeisen Capital Management, investment specialists (with longstanding expertise) analyse both, companies and equity markets and evaluate them in terms of regions, themes and sustainability.
What influence crises have on the equity markets?
Are equity investments still worthwhile? Crises have always had a direct influence on the equity markets. The video shows the crises over the past 50 years (using the global equity index MSCI World for example). As you can see, the equity market also rise again after crises. The quintessence: As an investor, you need staying power (i.e. a long-term investment horizon) and the necessary willingness to take risks when investing in equities.
Invest in equities – for example with equity funds!
Equities offer a good opportunity to build up long-term assets, diversify the portfolio and benefit from the development of various companies and sectors. This can be done easily and conveniently with the equity funds from Raiffeisen Capital Management. You also benefit from the know-how of our investment specialists. Find out more about our range of equity funds.
Investments in funds are subject to the risk of price fluctuations and capital losses.
Market outlook: equities
Equity market: new all-time highs?
Temporary corrections are part of a healthy bull equity market so that the market sentiment does not become overheated. As seen in April. But the major equity indices in Europe and the USA hit new all-time highs in May already. Because as long as the economic outlook is positive (as it is now), the path of least resistance for the equity markets is up.
With the budding recovery of global industry after around two years of industrial recession across the globe, the likelihood of steeply rising corporate earnings over the next 12 months is very high. And most equity markets are valued at normal levels (and the EM are even cheap) right now, with only the major US tech names being expensive in historical comparison due to the AI boom.
This means there is enough room for further price increases - even if we may see brief setbacks in the summer months or shortly before the US election at the beginning of November. That declining interest rates could even justify higher valuations over the medium term is just the icing on the cake. In other words, if the central banks fail to cut their key rates as much as currently expected in 2025 because of even better economic development (and the associated somewhat higher inflation rates), this would not be a lasting structural problem for the equity markets (but much more so for long-running bonds).
For 2024 as a whole, however, our fund management continues to expect that the equity market recovery will broaden over the medium and long term. Meaning that it will no longer be a handful of major US tech names that profit disproportionately, but that will pay off to set up a broader equity market portfolio. Over a one-year perspective, we are thus (also) bullish for equity segments such as Europe, Japan, the health care sector, and the broader technology sector (aside from the major tech groups), as well as companies from the energy transition.
As of June 2024
Equity markets in detail
Market conditions and global outlook for equitiy markets from the perspective of Raiffeisen Capital Management.
Forgotten Markets - China & New Energy
In global stock markets, there are always regions and sectors that are at the lower end of investors' favor and therefore are cheaply valued.
The magnificent 7 tech stocks
Our capital markets expert Valentin Hofstätter provides in-depth insights into what lies behind the outstanding performance of the equity markets in recent months – including the US market in particular – and why we should take a closer look at this past performance.
Equity funds
Raiffeisen Capital Management has more than 30 years of experience in managing equities. Choose from our wide range of equity funds.
Further examples of investing in equity funds
Megatrend Artificial Intelligence
ChatGPT is currently a hot topic of discussion. This software is seen as a milestone in artificial intelligence (AI). What long belonged to the realm of science fiction is now becoming reality. ChatGPT writes and analyses texts, poems, jokes, role playing games, and even programming code. And it is constantly learning in the process.
Invest in US equities
Rising bond yields, prospects for waning fiscal stimulus, and some high valuations are all generating headwinds, but parts of this market still look promising.
As of May 2024