Portfolio Manager Update | HESPER FUND - Global Solutions

HESPER FUND – Global Solutions (*)

State: 06/08/26

Key points at a glance

• The US and Iran escalated the war as the ceasefire unravelled, with new actors becoming involved.
• Global growth has held up well so far, albeit with regional differences.
• Fed Chairman Warsh was rebuked by investors craving a real fight against inflation after holding rates, with three officials dissenting in favour of a hike.
• Faith in AI was shaken, producing a chip meltdown, but it rebounded by the end of month.
• The HESPER FUND – Global Solutions (T-6 EUR) fell 0.06 % in July, as stocks, oil and bonds fluctuated amid frequent changes to the expected length of the war in Iran. Year to date, the fund has risen 2.09 %.
• The HESPER FUND reduced its duration further, from neutral to a net short position of 1.3 years and cut its equity exposure down to 33 %. FX allocation has been partially reversed, with long exposure to the US dollar turning into -18 % short position.

Oil prices have rebounded as the situation in the Strait of Hormuz remains unstable

The situation in Iran has developed into a smouldering conflict, alternating between moments of negotiation and military strikes. Is this another American 'forever war '? Despite serious geopolitical challenges, global growth remained robust during the first half of the year, albeit with regional differences. A recession is off the table, but the policy landscape is ambiguous, and growth will be slower than previously estimated. 

Wall Street initially welcomed Warsh’s tough talk about inflation. However, after leaving interest rates unchanged, the market sent Warsh a warning this week that tough talk alone is not enough. 

Big tech results at the end of the month reignited a rally in technology stocks after a sharp sell-off in AI stock that badly affected chipmakers.

Monthly performance and current positioning

The HESPER FUND – Global Solutions (T-6 EUR) fell by 0.3 %, as yields climb, gold fell towards a strong support level and stocks drifted lower on AI uncertainty. Total assets decreased by 1.3 % to € 49.5 million. Annualised volatility over the past 250 days remained stable at 8.1 %, while the annualised return since inception slowed to 3.7 %.

Throughout the month, the fund maintained a long exposure to equities, gold, commodities and the Norwegian krone, while gradually reducing duration through a combination of futures contracts on Gilts, OATs, BTPs, JBs and Treasuries.

Outlook: doubts have emerged in the US about the stance of the Fed on inflation

The sharp shift in US economic, political, military, and geopolitical policy has culminated in the current conflict with Iran. We expect the repercussions to be significant, with the potential to reshape the global economic and geopolitical landscape. The macroeconomic outlook will remain uncertain for as long as no lasting peace is established in the Middle East.

However, the resulting oil price shock proved insufficient to derail the otherwise resilient global economy. The US economy continues to demonstrate remarkable strength, supporting solid growth, and consumers are beginning to regain confidence. At the same time, underlying corporate earnings remain strong, reinforced by the ongoing productivity gains driven by artificial intelligence. Nevertheless, the inflation outlook remains uncertain, particularly considering an expansionary fiscal stance, a new round of tariffs and climate disturbances.

Overall, the HESPER FUND – Global Solutions maintains a constructive stance on equities, taking a selective approach across regions and sectors. Given the limited fiscal space, the dangerous high levels of debt and a less certain inflation outlook in the US, we remain cautious about sovereign bond yields and therefore reduce the duration further down to 1.3 years. In foreign exchange, we have reassessed the dollar prospects and shorted the greenback. We remain keen on the Norwegian krone.

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

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