Jean Boivin, Head of the BlackRock Investment Institute together with Alex Brazier, Deputy Head of he BlackRock Institute, Wei Li, Global Chief Investment Strategist, Chris Weber, Head of Climate Research and Eric Van Nostrand, Head of Research for Sustainable Investments all forming part of the BlackRock Investment Institute, share their insights on global economy, markets and geopolitics. Their views are theirs alone and are not intended to be construed as investment advice.

Key Points:

Drive for energy security – We see the West’s drive for energy security slowing growth, increasing inflation and stoking demand for non-Russian fossil fuels to alleviate consumer pain

Market backdrop – Data last week showed U.S. inflation at 40-year highs and a robust labor market. We expect the Fed to deliver on this year’s projected rate rises and then pause.

Week ahead – Global activity gauges this week may show how surging commodities prices are affecting global economies. We see Europe as most vulnerable to the shock.

The West is trying to wean itself off Russian energy in the wake of the tragic war in Ukraine. We see this hurting growth and increasing inflation in the short term. More supply of U.S. and other non-Russian fossil fuels will be needed to alleviate pressured consumers. This is a shift in global supply, not an increase. The drive for energy security should reinforce the transition to net-zero carbon emissions in Europe, and we see the transition’s speed now diverging more across regions.

Europe’s energy conundrum

The war in Ukraine is taking a horrible human toll, upending lives, and resulting in food and energy insecurity around the world. It has spurred a drive to secure energy supplies and led to price spikes – presenting a fresh supply shock in a world that was already shaped by supply. Among developed markets, the situation is acute in Europe. A surge in European energy prices means the region is now spending almost a tenth of its GDP on energy, the highest share since 1981. See the red line in the chart. This is why we think the impact of the energy shock will be greatest in Europe, and we see a risk of stagflation there. See Taking stock of the energy shock of March 2022 for full details. The U.S.’s energy burden (yellow line) is less than half Europe’s. We expect the energy shock to hit U.S. consumers and businesses, but see a much smaller economic impact than in the late 1970s. Why? The economy is more energy efficient these days, and the U.S. is now a net exporter of energy. We see U.S. growth staying above trend, thanks to the strong underlying momentum from activity restarting after the pandemic shutdowns.

The scale of the impact

The scale of the impact depends on the speed at which the West reduces its imports of Russian energy. Our base case is a steady reduction as the West and Russia enter a protracted standoff. Further escalation of the Ukraine war could speed this up. An easing of tensions could slow the process but is unlikely to stop it.

All this means Europe will need greater amounts of gas and other fossil fuels from the U.S. and elsewhere. The massive gap cannot be filled fast enough by ramping up the supply of renewables and nuclear energy or reducing demand via efficiency and conservation measures. Fossil fuel output in the U.S. and elsewhere needs to rise to make up for the shortfall caused by the effective stranding of Russian production. It is a shift in fossil fuel production, not an increase in demand.

This doesn’t mean the net-zero transition is being derailed, in our view. The world needs fossil fuels to meet current energy demands, given the way economies are wired today. At the same time, high energy prices ultimately reinforce the drive to cut carbon emissions. Why? They act as a sort of carbon tax on consumers, make renewables more competitive, and spur energy efficiency and innovation. Higher energy prices will hurt U.S. consumers as well, but also herald increased U.S. fossil fuel output. As a result, we may not see the same impetus to reduce emissions there as in Europe. Conclusion: We see the transition’s path diverging even more across regions.

What does all of this mean for investments?

On a tactical horizon, we are underweight government bonds and prefer equities over credit in the inflationary environment. Many DM companies have been able to pass on rising costs, and we see low real rates, the restart’s economic growth cushion and reasonable valuations favoring equities. We have cut our overweight to European equities as we see the energy shock hitting that region hardest. Also, prices have rebounded from the year’s lows. In addition, we see the shock creating investment needs in both traditional energy and renewables in the near term. The transition requires the world to go from shades of brown to shades of green, in our view.

On a strategic horizon, we have long argued that a tectonic shift of investor preferences toward sustainability would trigger a great repricing of assets across the board over time. This is why we incorporated climate change in our return and risk assumptions. We now have evidence of this repricing, and believe most of it is yet to come. This doesn’t mean sustainable assets always go up – but we believe it should add to their performance over time.

Market backdrop

U.S. inflation data for February showed price increases hovering near 40-year highs. The report showed a further rotation back to services spending as the economy, and away from goods spending. Jobs data showed a robust labor market. We see the Fed normalizing policy and delivering on its projected rate path this year but then pausing to evaluate the effects on growth. We believe the eventual sum total of rates in this cycle will be historically low, given the level of inflation.

Purchasing Managers’ Index reports this week will enable investors to to gauge how surging commodities prices are affecting global economies. We believe the war will weigh materially on European economic activity as the region tries to wean itself off Russian energy. We see the impact on U.S. activity as muted for now. Read A new supply shock for details

Assets in Review

Week ahead

• April 5 – U.S. ISM non-manufacturing PMI; Global composite PMIs
• April 6 – Fed minutes; Poland central bank meeting; China Caixin Services PMI

BlackRock’s Key risks & Disclaimers:

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of February 28th, 2022 and may change. The information and opinions are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging/developing markets or smaller capital markets.

Issued by BlackRock Investment Management (UK) Limited, authorized and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL.

MeDirect Disclaimers:

This information has been accurately reproduced, as received from  BlackRock Investment Management (UK) Limited. No information has been omitted which would render the reproduced information inaccurate or misleading. This information is being distributed by MeDirect Bank (Malta) plc to its customers. The information contained in this document is for general information purposes only and is not intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available in this document is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.

The financial instruments discussed in the document may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.

If you invest in this product you may lose some or all of the money you invest. The value of your investment may go down as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any income you get from this investment may go down as well as up. This product may be affected by changes in currency exchange rate movements thereby affecting your investment return therefrom. The performance figures quoted refer to the past and past performance is not a guarantee of future performance or a reliable guide to future performance. Any decision to invest in a mutual fund should always be based upon the details contained in the Prospectus and Key Investor Information Document (KIID), which may be obtained from MeDirect Bank (Malta) plc.

Franklin Templeton’s Notes from the Trading Desk offers a weekly overview of what our professional traders and analysts are watching in the markets. The European desk is manned by eight professionals based in Edinburgh, Scotland, with an average of 15 years of experience whose job it is to monitor the markets around the world. Their views are theirs alone and are not intended to be construed as investment advice.

The Digest

Global equities moved higher again last week, despite a series of headwinds. The MSCI World Index closed the week up 0.3%, while regionally, the STOXX Europe 600 Index closed up 1.1%, the S&P 500 Index closed up 0.1%, whilst the MSCI Asia Pacific Index closed up 0.3%. Nothing really changed with regards to the major themes last week, as we were still at the mercy of continuing headlines regarding Ukraine, with optimism regarding a ceasefire outweighing the reality of continued violence and destruction by Russian forces. Inflation remained at record levels, increasing the likelihood once again of sharper-than-expected central bank tightening. Meanwhile, market volumes remained low on the move higher. The overall index moves last week continue to mask the sector performance divergence globally. Overall, a very mixed picture underneath what appears to be a slow grind higher.

An Eventful First Quarter in Europe

European equities closed the first quarter down 6%, which was hardly going to stand out in the record books. However, it is the journey of how we got here which is notable, as investors have endured a lot of uncertainty so far this year. Inflation is at record levels, with the latest eurozone Consumer Price Index (CPI) report in March jumping to 7.5% year-on-year (y/y) vs. 5.9% in February. Energy and unprocessed food prices have driven inflation to new highs, reflecting Russian President Putin’s war in Ukraine, as both Russia and Ukraine are major exporters of energy and agricultural commodities. Persistently high inflation has driven more hawkish central bank rhetoric, as bankers attempt to fight the effects of inflation. By late January, global equities were having their worst start to a year since 2009, with January itself the weakest month since the start of the COVID-19 pandemic in March 2020.

Added to that was the political uncertainty itself, derived from Putin’s invasion, as countries imposed strict sanctions on the Russian economy. Gross domestic product (GDP) forecasts were cut, with the Bundesbank predicting a recession. Meanwhile, equity strategists cut their index price targets as market sentiment hit levels not seen since the start of the pandemic. Some European equity markets traded in bear market territory at one point, meaning they traded down 20% from their highs. Also, European equities record their largest weekly outflow of all time at the start of March, shedding US$13.5 billion.

Yet, despite the significant increase in market risk, the sharp spike in volatility at the start of March, and the exodus from European equity funds, European equities have held up remarkably well, closing the quarter down just 6% overall. However, sector performance divergence has been huge. Basic resources and energy stocks have held up well, tracking oil and commodity prices. At the other end, retail stocks in Europe really struggled during the quarter, as retailers face surging cost pressures and falling consumer sentiment. Technology stocks were also down on the quarter, driven by the huge rotation out of growth and into value. Market volumes were significant at the start of the year, but we have seen that volume taper off in the last few weeks as equities (at an index level) regained their footing.

In terms of credit markets, stubbornly high inflation and the prospect of higher fiscal spending have dented sovereign debt performance in Europe.

Limited Signs of a Ceasefire in Ukraine

Markets seem to be looking towards a ceasefire in Ukraine. Equities were buoyed at the start of last week on news that Ukrainian President Volodymyr Zelenskyy was ready to discuss Ukraine’s future neutrality. There was also a report last Tuesday that Russia would be scaling back its attacks in northern Ukraine. However, Russia’s attacks continued, with Ukrainian officials saying they saw limited evidence of a Russian retreat. Reports over the rest of the week showed little hope of any imminent de-escalation, with the crisis appearing to deepen in some areas of the country as Russian forces appeared to regroup, especially in the south and east.

Over the weekend, Russia’s chief negotiator, Vladimir Medinsky, said that peace talks had not progressed enough so far to grant a leaders’ meeting. The two sides have been holding talks for several weeks now. However, both remain far apart on the question of territory in southern Ukraine. Medinsky said that Ukraine had agreed it would be neutral, not have nuclear weapons, not join a military bloc and refuse to host military bases. However, on the question of Crimea and the two Russian-backed rebel regions in Donbas which Putin recognised as independent in February, Medinsky indicated there had been no progress. Ukraine had also accused Russian troops of a “deliberate massacre”, after hundreds of bodies were reportedly found in towns outside Kyiv in the wake of Russian troops’ withdrawal. Russia continued attacks on the cities of Odessa and Kherson.

Several reports over the weekend suggest that the European Union (EU) was planning a further round of sanctions on the Kremlin. Diplomats said that EU ambassadors are to decide on the measures this Wednesday. Among those discussed include punishing more Russian individuals, banning Russian ships from docking at EU ports, and further export restrictions and embargoes on energy. Lithuania has stopped importing natural gas from Russia and has urged other EU member states to do the same. The UK government has expanded its sanctions against Russia to 14 more people and organisations principally involved with information and media, whilst the US government announced sanctions on a global network of companies that are helping the Russian military evade multilateral bans on the sale of advanced technology to Moscow.

There was also a report this morning that French President Emmanuel Macron is calling for sanctions on oil and coal imports. It is notable that Macron never mentioned Russian gas, which accounts for about 40% of the EU’s natural gas imports.

We also continue to watch for the ripple effect from the Ukraine crisis. Of note last week, automobile manufacturer Volkswagen’s truck and bus subsidiary, MAN, furloughed 11,000 staff on shortage of wiring, which comes from Ukrainian factories. Germany took the first formal step towards gas rationing, entering their “early warning phase”. This means the government will increase monitoring on import and storage. The EU aims for 80% gas storage by November and they are currently at 26%, close to a four-year low. Also, a further Russian bond, held by domestic and international investors, is due for repayment 4 April and Russia has indicated it will pay it.

Week in Review

Europe

Last week was interesting for European equities, with markets steady going into quarter-end comfortably back above pre-invasion levels. Last the week, the STOXX Europe 600 Index rose 1.1%. Last Tuesday saw some exuberance in markets following peace talks, and we saw a squeeze in recent underperformers such as auto parts and food delivery names, suggesting positioning was behind a lot of the move. Last Wednesday saw a reversal of much of that move, as a dose of realism kicked in and there was little evidence of a de-escalation in Ukraine. It is notable that despite the bounce in the second half of March, European equities saw their seventh week of outflows last week. That, combined with the low volumes, suggests the move higher was not driven by much conviction and more a case of positioning.

European credit markets remain calm, with the Markit iTraxx Crossover also back to pre-invasion levels and the credit default swaps (CDS) of European financials also tightening once again.

European Credit Back to Pre-Invasion Levels

On macro data, we saw the German CPI at a fresh post-unification high, up7.3% y/y. This is the highest y/y print since November 1981. In addition, Spanish inflation reached 9.8% y/y. European Central Bank President Christine Lagarde said last week that Europe is “entering a difficult phase” and “the longer the war lasts, the higher the economic costs will be.” The market now sees the ECB raising twice by year end. In the United Kingdom, the Bank of England (BoE) warned of a “historic shock” to household incomes because of soaring inflation and rising energy prices.

United States

US index performance last week suggested a rather subdued week, with the S&P 500 Index up 0.1% on-the-week and the Dow Jones Index down 0.1%. Positioning was a theme through the week, as markets navigated the first quarter end, with the S&P 500 Index dropping sharply in the last hour of trading last Thursday, 31 March before stabilising somewhat on Friday 1 April. The S&P 500 Index is now down 4.6% year to date (YTD), having recovered from early March lows post the Russian invasion of Ukraine, when the Index was down as much as 13.7% YTD. Looking at sector performance last week, the outperformers were the rate-sensitive real estate investment trusts (REITs) and utilities. In terms of losers, the financials declined as the flattening curve is seen as a negative for the sector. With crude oil’s sharp fall, it was no surprise to see energy stocks decline as well.

Aside from quarter end, other talking points last week included the aforementioned sharp pull back in crude oil, which fell 12.8% to US$100.32 per barrel (bbl) after US President Joe Biden’s administration announced plans to release 1 million barrels per day (mpd) from strategic reserves for the next six months to ease the pressure on US consumers. With mid-term US elections looming large later in the year and the impact of inflation, this will no doubt be a key issue.

Last Friday saw the monthly US employment data, which was somewhat hawkish. The headline was the nonfarm payrolls, which came in slightly lower than anticipated, at 431,000 jobs added. However, the previous month’s reading was revised up to 750,000 vs. 678,000 originally reported. Unemployment ticked lower in March to 3.6%, and average hourly earnings continued to rise faster than expected at +5.6%. With that, the market now sees about an 80% probability of a 50 basis points (bps) interest rate hike in May. The market has also priced in 8.7 additional 25 bps hikes by the end of the year.

Another talking point was the US Treasury yield curve’s inversion. The upward pressure on short-term rates on the back of rising interest rate hike expectations caused the US two-year/10-year curve to invert and finish the week down 6.9 bps.

An inverted yield curve has generally been seen to be a strong harbinger of recession. The two-year/10-year curve has inverted ahead of every single recession, bar one, in the past 60 years.

Asia-Pacific

Last week was decent for Asian markets overall, excluding Japan, with the MSCI Asia Pacific Index closing just in the black, up 0.28%. Equities’ attractiveness as an inflation hedge was cited as a factor behind recent market strength, while corporate activity has been a driver following Hong Kong tech results and buyback announcements. However, inverting yield curves continue to drive talk about the potential for a recession, and there are thoughts stock markets are not properly pricing in economic, inflation and monetary policy risks.

Japan ended its nine-day winning streak on Monday, and this weakness continued over the course of last week, with the Nikkei Index closing the week down 1.72%. Focus was on the weaker Japanese yen, which was trading at its lowest level since December 2015 versus the US dollar (positive for exporters but negative for households). The government announced it would step in to support the bond market after the 10-year JGB yield crept up to a six-year high of 0.245%. This highlighted the Bank of Japan’s resolve to keep rates ultra-low, even as other central banks such as the US Federal Reserve (Fed) move towards rate hikes.

Japanese retail sales fell by more than expected on the Omicron variant wave, driving more concerns about an economic pullback in the first quarter. On Friday we had the first-quarter Japan Tankan Large Manufacturing Index, which came in at 14 amid supply chain pressures and high raw material prices. However, Japan’s final Purchasing Managers’ Index (PMI) report for March came in stronger than expected.

Last Monday, authorities in China announced a four-day lockdown of half of Shanghai. The sweeping restrictions came as China experienced its worst COVID-19 spread since the virus’s emergence in Wuhan, with more than 6,000 locally acquired cases reported nationwide last Sunday. This obviously had a knock-on effect to the markets and put crude oil under some pressure. However, we did see a rebound from lockdown-driven weakness on Wednesday.

On Thursday, the China Securities Regulatory Commission (CSRC) said in a statement that China is aware of the comments made by the US Securities and Exchange Commission (SEC) chair on auditing cooperation, and that talks between China and the US Public Company Accounting Oversight Board will continue. Nevertheless, US-China frictions still an overhang for markets, as the SEC added to the list of Chinese companies facing possible delisting from US exchanges, including technology company Baidu. Takeaways from major bank earnings guidance highlighted multiple headwinds ahead. Official China PMIs showed a synchronous contraction across manufacturers and nonmanufacturers, mainly reflecting lockdown effects.

Last week was better for Hong Kong’s equity market, which closed up 2.97%, with Meituan leading technology stocks higher following better-than-expected earnings. This morning, Hong Kong Chief Executive Carrie Lam said she wouldn’t seek a second term, ending a tumultuous five-year tenure that saw the financial hub become more isolated due to its twin crackdowns on COVID-19 and the democratic opposition.

Elsewhere, in Australia, the budget was released, and contained fresh one-off payments to relieve cost of living pressures. However, early takes also noted the potential to worsen inflation and encourage more aggressive tightening from the Reserve Bank of Australia.

Sri Lankan equities had a turbulent week, with the benchmark closing down 19% last week as the International Monetary Fund (IMF) said it will start talks with Sri Lanka on loan requests soon.

Note that both China and Taiwan are closed 4 April and 5 April, and Hong Kong is closed 5 April. Markets are therefore likely to be subdued at the start of the week before events pick up later in the week. The focus will continue to be on inflation, the conflict in the Ukraine, oil prices and interest rates.

Week Ahead

This coming Sunday (10 April) sees the first round of the French Presidential election. Incumbent President Macron and the right-wing candidate, Marine Le Pen, look likely to progress to the second round head-to-head on 24 April. Polls have tightened in recent weeks, with Macron losing some ground to the chasing pack.

Holidays

•  Monday 4 April: China
• Tuesday 5 April: China, Hong Kong

Key Events

• Tuesday 5 April: Russia CPI Inflation
• Wednesday 6 April: US Federal Open Market Committee (FOMC) minutes
• Thursday 7 April: Germany Industrial Production (IP); ECB monetary policy account
• Friday 8 April: US jobless claims

Calendar

Monday 4 April:

• Turkey CPI Inflation
• The Eurogroup will meet in Luxembourg to discuss the impact of the war in Ukraine on the euro area.
• BoE Governor Andrew Bailey and Deputy Governor Jon Cunliffe are scheduled to speak at separate events. Cunliffe dissented against the March interest rate hike to 0.75%.
• Germany trade balance
• US factory orders

Tuesday 5 April:

• Russia CPI inflation
• France manufacturing and IP
• UK new car registrations
• Italy YTD deficit to GDP
• US trade balance

Wednesday 6 April:

• ECB Chief Economist Philip Lane is due to speak on a panel at the Delphi Economic Forum in Greece.
• Germany factory orders
• Eurozone PPI
• US FOMC minutes

Thursday 7 April:

• German IP
• ECB monetary policy accounts
• BoE Chief Economist Huw Pill speaks at the bank’s International Conference on Sovereign Bond Market.
• Germany IP
• US jobless claims
• US consumer credit

Friday 8 April:

• A second estimate of Russia’s 2021 GDP will bring the first official reading of fourth quarter growth. Expect Y/Y expansion of 4.9%, consistent with quarterly acceleration. After a bout of overheating before the war, Russia’s economy is now headed for a sharp contraction in 2022.
• Italy retail sales

Franklin Templeton Key risks & Disclaimers:

What Are the Risks?

All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.  Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity.

Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.

Past performance is not an indicator or guarantee of future performance. There is no assurance that any estimate, forecast or projection will be realised.

This article reflects the analysis and opinions of Franklin Templeton’s European Trading Desk as of 4 April 2022, and may vary from the analysis and opinions of other investment teams, platforms, portfolio managers or strategies at Franklin Templeton. Because market and economic conditions are often subject to rapid change, the analysis and opinions provided may change without notice. An assessment of a particular country, market, region, security, investment or strategy is not intended as an investment recommendation, nor does it constitute investment advice. Statements of fact are from sources considered reliable, but no representation or warranty is made as to their completeness or accuracy. This article does not provide a complete analysis of every material fact regarding any country, region, market, industry or security. Nothing in this document may be relied upon as investment advice or an investment recommendation. The companies named herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. Data from third-party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user. Products, services and information may not be available in all jurisdictions and are offered by FT affiliates and/or their distributors as local laws and regulations permit. Please consult your own professional adviser for further information on availability of products and services in your jurisdiction.

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MeDirect Disclaimers:

This information has been accurately reproduced, as received from Franklin Templeton Investment Management Limited (FTIML). No information has been omitted which would render the reproduced information inaccurate or misleading. This information is being distributed by MeDirect Bank (Malta) plc to its customers. The information contained in this document is for general information purposes only and is not intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available in this document is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.

The financial instruments discussed in the document may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.

If you invest in this product you may lose some or all of the money you invest. The value of your investment may go down as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any income you get from this investment may go down as well as up. This product may be affected by changes in currency exchange rate movements thereby affecting your investment return therefrom. The performance figures quoted refer to the past and past performance is not a guarantee of future performance or a reliable guide to future performance. Any decision to invest in a mutual fund should always be based upon the details contained in the Prospectus and Key Investor Information Document (KIID), which may be obtained from MeDirect Bank (Malta) plc.