Union Investment launches UniRak North America as a mixed fund. This will complement the existing UniRak fund family by a variant with a focus on North America.
UniRak North America invests in North American equities and bonds. The focus is on US dollar-denominated US securities. In addition, fund management has the ability to mix stocks and bonds from Canada and Mexico. Large and mid-caps are mainly purchased in the equity sector. In the area of interest-bearing securities, approximately half of the fund’s assets are invested in government and corporate bonds. There is no currency hedging.
Flexible mix of equities and bonds
UniRak North America is aiming for a share of approximately two-thirds and a share of pensions of approximately one third. The quotas are flexible. In turbulent times on the capital markets, stocks can be reduced to 51% and can be built up to a maximum of 80% in phases with high chances. The mix of equities and bonds not only increases the yield chances, but also tends to reduce fluctuations in value.
North America as an attractive investment region
North America is the world’s largest and most liquid equity market. The investment region is also referred to as the “world’s innovation cradle”. Looking at the US economy, Marco Schneider, who is responsible for funds and manages the equity share of UniRak North America said, “The unemployment rate in the US has fallen from around 10% to currently less than 5% since 2010. The US early indicators still signal an intact, solid economic growth. The economy should continue to support Donald Trump’s planned economic recovery program.” He also points to the better profitability and the higher return on capital of American companies compared to European companies.
Growing interest rate gap between the US and Europe
The higher interest rate also applies to North America, especially the USA. “The interest rate differential between US government bonds and government bonds in the short and long-term maturity range is currently around 2%,” says Joachim Buddendick, who is responsible for the pension portion of UniRak North America. The latest rate hike in the US is likely to be followed by two interest rates in June and September. “In the € area, on the other hand, interest rates remain low for the time being. As a result of this growing interest rate gap between the US and Europe, investors in overseas can achieve increasingly attractive returns”, he added.
UniRak North America is suitable for risk-conscious investors who want to benefit from the positive growth outlook in North America and invest in US dollars. Your investment horizon should be five years or longer.