Investment, Wealth and Savings (IWS) 2020

Few people thought that 2019 would be about a stock market rally even amidst such geopolitical risks and concerns regarding global economic growth. Aside from stocks, the commodity and raw material markets also took off last year, while there is an growing sentiment that the current price levels are unsustainable. Somehow, the investment world has found itself pushing the gas and brake pedals at the same time as nobody wants to miss out on a soaring stock market but everyone is ready to seek cover should things go south. The question is, what will 2020 bring? Pedal to the metal or locked brakes? Or maybe both?

Similar to stock indices, key raw material prices rose sharply last year: among metals, palladium saw its price climb 44%, in the oil market, WTI rose 22%, while coffee costs 26% more than a year ago. Gold has gained handsomely despite the stock market also doing well last year, so it is questionable whether it makes sense to get on board after such a big increase. There was also an interesting phenomenon in the property market, as the rate of price increase seen in recent years slowed. Should higher yields be sought in the residential, commercial, industrial or office segments?

Investors are increasingly into environmental awareness, and this shows in investments as well: investments prioritising environmental, social and governance (ESG) are gaining ground at an astounding rate, while an increasing number of Hungarian fund managers are coming up with their own ESG or thematic funds and businesses now consider ESG certificates essential.

The summer of 2019 marked the dawn of a new era in the Hungarian savings market with the introduction of the 'superbond', which has brought a series of changes to market players. Despite good yields, investment funds were unable to attract substantial new investments in 2019, property funds were among the chief casualties of the MÁP+ bond, the amount of stocks held by households is increasing but not fast enough, while cash use has reached unprecedented levels.

The domestic private banking sector has grown to HUF 6,000 billion and the rate of asset growth is reminiscent of pre-crisis years. The number of customer accounts is not growing at the same rate, however, meaning that increasing wealth is being concentrated in less and less accounts. The number of private bankers has remained level at best in recent years, and there is increasing pressure on them while discretionary portfolio management is beginning to gain ground in Hungary. Meanwhile, wealthy customers demand more than simply high yields, and managing family assets now often requires trust wealth management.

Digital novelties are spreading like wildfire in investments, and service providers who wish to remain competitive must take customer service to a new level. This section aims to outline, through flash presentations, the new investment platforms and decision support systems now available in Hungary to private bankers, portfolio managers and their customers. 

Aside from ESG, thematic investments are also conquering the world, building on the key trends of the present and the future. Environmental protection, innovation, healthcare and automation are just a few of the fields in which these funds are investing.  This section aims to show through flash presentations what the most promising thematic funds in Hungary are investing in.

Hungarian absolute return funds has a successful year in 2019, with the cream of the crop boasting 10% or even higher returs. Of course, it is not that hard to produce high returns in a world where asset prices are breaking new records, but what happens when some professional investors are already setting up for a different environment? This section aims to offer an insight into the market visions and investment strategies of renowned portfolio managers managing absolute return funds.