Portfolio Manager Update | HESPER FUND - Global Solutions

HESPER FUND – Global Solutions (*)

State: 06/10/25

Key points at a glance

• Gold hit new fresh highs amid high tension between NATO and Russia and the toxic polarization of US politics.
• Trump continued to cut new deals and extended his tariff push to a wide set of industries.
• The global economy remains resilient underpinned by fiscal and monetary support.
• The HESPER FUND – Global Solutions rose by 2% in September as stocks reached new highs and gold rallied to record. Year-to-date performance is at 4.15%.
• The HESPER FUND adjusted its portfolio only slightly in response to the improved visibility of the trade-related scenario.

NATO’S HYBRID WAR

HESPER FUND – Global Solutions Macro scenario: stocks set new highs despite growing risks

Tension with Russia heightened as a hybrid war ignites after repeated NATO’s airspace violations. US president signaled a further change shift in stance on Ukraine, while NATO allies remain divided over how to address Moscow’s threats.

Trade-related scenario improved but Trump continued to push new sectoral tariffs and his rapid and chaotic policy overhaul.

The Fed finally decided for a “risk management” rate cut, but risks are balanced, and the economy is slowly moving away from the Fed’s targets as inflation remains sticky and the labour market is rapidly softening.

To reduce its ballooning budget deficit and soaring debt, France is debating the introduction of a new wealth tax or raising the corporate flat tax as meaningful expenditure cuts appear politically unfeasible.

Monthly performance and current positioning

The HESPER FUND – Global Solutions (T-6 EUR) rose 2.0% on FX gains, higher US stock indices and - most notably - the gold rally. Total assets increased marginally to 52.4 million EUR. Volatility over the past 250 days decreased to 5.32%. The annualised return since inception rose to 3.56%.

As the macro situation looked less uncertain, the need for rotation positioning diminished but we remain wary about further policy and geopolitical developments. During the month, the fund raised the equity quota up to 48% adding exposure to emerging markets, increased the duration slightly up to 5.4 years and traded actively the NOK.

The performance in September (2.0%) was as follows: 0.03% for fixed-income instruments; 0.61% for equities; 1.13% for commodities; 0.32% for currencies and -0.09% for fees and expenses.

Outlook: Global rules-based orders are fading, risks are rising. 

The sharp shift in US economic, political and geopolitical policy will significantly impact the global outlook for 2025 and beyond. Corporates and countries worldwide will need to adapt to the new reality.
US protectionism is causing a significant shock to global demand. Strategic interdependence is rewiring the global economic relationships. The US-China trade relationship can no longer be driven solely by cost and efficiency. Although growth will slow, we do not see an impending recession as likely.

Concerns around the health of U.S. democracy are intensifying, with the looming government shutdown serving as a key example. Trump’s authoritarian tendencies are evident in many areas. Dazzled by the prospect of Fed rate cuts, equity markets are showing excessive complacency about Trump’s erratic behaviour.
It is surprising how calm the markets remain while the US-President defies the independence of the Fed and other federal agencies. We remain on alert in case doubts about US exceptionalism would increase further.

As a result, we continue to shorten the US dollar, currently at 30%, keep almost 10% of gold exposure and avoid longer US Treasuries maturities.
Due to the high level of ongoing policy uncertainty, we are maintaining low exposure across most asset classes and avoiding large, concentrated investments for the time being.

*HESPER FUND - Global Solutions is currently only authorised for distribution in Germany, Luxembourg, Belgium, Italy, France, Austria and Switzerland.

** It excludes an arbitrage in the forward market between the US dollar and the Hong Kong dollar. This transaction artificially elevates the overall exposure to the dollar to 89%, where it would otherwise be 0%.

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