Aegon Emerging Market ESG Equity Investment Fund
CZK series
MONTHLY report - 2021 JULY (made on: 07/31/2021)
MARKET SUMMARY
In July, stock markets continued their rally, and all but the Russell 2000 index reached new all-time highs. In our view, this is invariably due to the central bank's
action of supplying an unlimited amount of liquidity. If we look at the valuations’ of equities, we see that they are relatively higher than they were when the Nasdaq
bubble burst in 2000 and the housing bubble burst in 2007. If you compare it to the previous quarter, stocks have also continued to appreciate relative to that
quarter. At the end of March, the BF P/E was 22, also considered extremely high, but that number had risen to 23 by the end of July. What is noticeable, however, is
that investors are not so confident that at these levels stock market values are pegged at realistic prices. Amid a minor scare in the middle of the month, there were
almost no buyers and the indices fell more than 1.5% in 1 day. As we have pointed out many times before, this investment environment is solely due to the central
bank's supply of unlimited liquidity. The problem will arise if inflation, contrary to the central bank's expectations, becomes permanent rather than temporary. The
financial authorities will also have no choice but to raise interest rates, which in turn will hit equity investments very hard. Europe's economy has continued to
improve over the past month, and this is likely to have been helped by the fact that recovery aid set up during the epidemic has started to be distributed to the
member countries. The preliminary reading is that activity in the Eurozone's services sector showed a third month of growth, strengthening to 58 from 55.2 in May.
At the same time, manufacturing was also strong, with a reading of 63.1 reflecting 12 months of expansion. Of course, these macroeconomic numbers could quickly
turn negative if the virus starts to spread again. In addition, the ECB raised its inflation target from less than 2 percent to above 2 percent, while accepting a
temporary overshoot. The move, while not new, could help the industrial sectors.
China's economy is contracting again after rising in recent months. China's manufacturing PMI was 50.9 in June after 51 in May. Caixin's China manufacturing index
fell to 51.3 in June from 52 in May. The Caixin China Services Sector Purchasing Managers' Index fell sharply in June to 50.3 from 55.1 the previous month, a 14-
month low. China's GDP grew by 7.9% on a year-on-year basis in the second quarter, slightly below expectations. As we can see China is slowing down and the
question is what impact this will have on the world economy.
Hungary continues on the path it started in mid-May. The economy continues to open up, but the problem is the rise of inflation. In June, the central bank raised the
base rate by 30 basis points, and in July raised it again by another 30 basis points. So now the base rate is 1.20 percent. The inflation figures caused the forint to
weaken against the euro from 352 to 362 during the month, but it strengthened back to 358 after the announcement of the rate hike. The fund posted a negative
return in July but outperformed the benchmark index. The reason for the outperformance was that the fund was underweight in Chinese equities by 10%. Events in
China put pressure on the whole emerging market in July. Last month, the Chinese Communist Party took an unexpected decision that upset the Chinese investment
environment. The decision means that Chinese education companies can now only operate as non-profit companies. This decision will fundamentally change the
investment environment in China, as it is not the potential growth of companies that determines share prices, but the directives of the state leadership. Against the
Chinese underweight we overweighedted by countries with a higher proportion of cyclical sectors, such as Russia, Brazil, Mexico and the CEE region.
INVESTMENT POLICY OF THE FUND
The objective of the fund is to benefit on the economical growth of emerging countries. The fund accomplishes this goal basically via individual equity investments,
however it may also hold collective investment instruments, if it is necessary for the efficient management of the portfolio. These can primarily be ETFs listed on the
stock exchange, bank deposit, account money, repo transactions, and open-end public investment funds. In the course of selecting the equities the Fund dedicates
special attention to the compliance of individual companies with ESG (environmental, social, governance) criteria, so in addition to analyzing the financial factors,
portfolio managers also take into consideration environmental, social and governance factors during the investment decision making process. The goal of the Fund
Manager is to establish a portfolio, in which the average of indicators measuring ESG compliance of the individual companies is more favorable than the aggregated
indicator of the benchmark index, i.e. their operation is characterized by more advanced environmental, social and governance responsibility.
Environmental criteria include elements in the course of which the company comes into contact with the environment. Besides these, no additional special goals are
set by the Fund.
These include for example the energy utilization, waste management, pollutant emission and/or the preservation of natural resources. Social criteria include all
relations maintained by the company with its external partners, customers and internal employees. Corporate governance criteria are legal factors impacting reliable
operation of a company.
GENERAL INFORMATION
NET YIELD PERFORMANCE OF THE SERIES
Fund Manager:
AEGON Hungary Fund Manager Ltd.
Custodian:
Unicredit Bank Hungary Zrt.
Main distributor:
AEGON Hungary Fund Manager Ltd.
Benchmark composition:
100% MSCI EM (EMERGING
MARKETS) ESG
ISIN code:
HU0000723697
Start:
06/16/2020
Currency:
CZK
Net Asset Value of the whole Fund:
13,171,137,903 HUF
Net Asset Value of CZK series:
95,852 CZK
Net Asset Value per unit:
1.198155 CZK
Interval
Yield of note
Benchmark yield
From start
17.47 %
18.88 %
DISTRIBUTORS
ERSTE Group Bank AG Austria
SUGGESTED MINIMUM INVESTMENT PERIOD
RISK PROFILE
3 mths
6 mths
1 yr
2 yr
3 yr
4 yr
5 yr
1
2
3
4
5
6
7
Lower risk
Higer risk

Aegon Emerging Market ESG Equity Investment Fund
CZK series
MONTHLY report - 2021 JULY (made on: 07/31/2021)
ASSET ALLOCATION OF THE FUND
NET PERFORMANCE OF THE SERIES
Asset
Weight
Collective securities
66.66 %
International equities
26.05 %
Hungarian equities
3.44 %
Current account
3.96 %
Liabilities
-0.18 %
Receivables
0.07 %
total
100,00 %
Derivative products
3.97 %
Net corrected leverage
103.95 %
Assets with over 10% weight
2020.10.01.
2021.01.01.
2021.04.01.
2021.07.01.
1,1
1,2
1,3
net asset value per share, 08/01/2020 - 07/31/2021
Aegon Emerging Market ESG Equity Investment Fund CZK series
Benchmark
RISK INDICATORS FOR THE LAST 12 MONTHS
Annualized standard deviation of the fund's weekly yields
13.35 %
Annualized standard deviation of the benchmark's weekly
yields
13.79 %
WAM (Weighted Average Maturity)
0.00 years
WAL (Weighted Average Life)
0.00 years
TOP 5 POSITIONS
Asset
Type
Counterparty / issuer
Maturity
Lyxor MSCI Taiwan UCITS ETF
investment note
Lyxor MSCI Taiwan UCITS ETF
Xtrackers ESG MSCI EM UCITS ETF
investment note
Xtrackers ESG MSCI EM UCITS ETF
Lyxor MSCI India UCITS ETF
investment note
Lyxor MSCI India UCITS ETF
Lyxor MSCI Korea UCITS ETF
investment note
Lyxor MSCI Korea UCITS ETF
Xtrackers MSCI EM ESG Leaders
investment note
Xtrackers MSCI Emerging Market
Legal declaration
The recent document qualifies as Portfolio Report according to the Kbftv. requirements. It contains the following elements based on the last net asset value of the reporting month: presentation of the assets of the fund
regarding asset type of portfolio investment and regarding other categories detailed in its investment policy; list of assets (issuers) representing more than 10% of the portfolio; net asset value of the fund, including the
cumulated and the calculated value per unit share. Investors are kindly advised, that past performance of the fund does not guarantee future performance. The returns presented are to be considered without applicable
taxes, distribution fees and commissions, fees related to account keeping and other costs in relation with holding an investment fund unit. Information presented in the Portfolio Report are for information purposes only,
not intended to serve as investment advice, or any other offer. Investors are kindly advised to carefully read the Key Investors Document and Prospectus of the fund, in order to understand the risks of investing into the
fund, and to be able to make an informed investor decision. The referred documents are available at the distribution locations and on the official website of Aegon Alapkezelő Zrt.
Aegon Magyarország Befektetési Alapkezelő Zrt. | 1085 Budapest, Kálvin tér 12-13. | +36 1 477 4814 | alapkezelo@aegon.hu | www.aegonalapkezelo.hu