Hungary changes course

At Tricio we focus on economic cycles, market structures and investor behaviour in order to help clients navigate markets with a medium to long-term investment outlook. We often use charts as a gauge of investor sentiment and behaviour.  

The election in Hungary over the weekend saw a landslide change in regime with the Tisza party look set to have over 2/3rds of the seats in parliament. The markets have taken this well with the BUX index (weekly chart, semi-log with 13 and 50-week moving averages) hitting new highs and the HUF firming vs. the USD and EUR. The view from most analysts and media is that the political change in Hungary will see warmer EU relations which should unlock funds for both Hungary, and broader support for Ukraine as well.

Direct exposure to Hungarian shares may not suit foreign investors. The Amundi MSCI Eastern Europe Ex-Russia UCITS ETF (acc., weekly chart below) does offer exposure to this market though. Hungarian shares make up just over 20% of the holdings, with Polish shares making up 71% and Czech Republic shares just below 8%. The ETF weathered the Russian invasion of Ukraine, the US April 2025 tariff shock and is now dealing with the energy shock from the US war in Iran. Making new all-time highs in the face of all this is not a bad sentiment signal. Investors are right to be cautious about buying at new all-time highs of course. But, on a medium to long-term view, exposure to this sector makes sense for allocations to this part of the European economy.

For further information on our research insights and our ‘Ask a Buddy’ CIO service please contact us at info@tricio-advisors.com 

Gerry Celaya,

Chief Strategist