Portfolio Manager Update | HESPER FUND - Global Solutions

HESPER FUND – Global Solutions (*)

State: 03/09/26

Key points at a glance

• Global growth held up well with regional differences underpinned by fiscal support.
• Talks at dead end in Ukraine and a stalemate in Hormuz as the fragile truce expired.
• US government debt hit $ 40 trillion as borrowings rose at historic rate.
• The US Treasury Secretary Scott Bessent becomes the all-around player to shape the US economy.
• Warsh vowed to reach 2% inflation fueled rate hike bets
• Tech stocks extended rebound as Nvidia forecasts sales surge fueled by relentless AI boom.
• The HESPER FUND – Global Solutions (T-6 EUR) rose 2.3% in August, as stocks and gold recovered and yields edged up further. Year to date, the fund rose 4.43%.
• The HESPER FUND raised a bit its net short duration stance up to of -1.5 years and kept equity exposure at 35%. FX allocation has been fine-tuned across the month, being short USD and long NOK most of the time.

Global bond rout sends borrowing cost to highest levels in decades

Despite serious geopolitical challenges and conflicts, global growth continued to hold up well albeit with regional differences and recession remains off the table. Eurozone business activity picked up as well as inflation.

The US pivoted to an economic warfare against Iran threatening sanctions to its trade partners and extending the conflict indefinitely.

The US Treasury coordinated with Japan to prop up the yen and surprised markets buying long-dated Treasuries to backstop the rise in yields. Needless to say, when interventions are not followed by policy changes, the effects wane soon. As it happened., the US escalated a trade dispute with neighbour Canada to a full-blown trade war.

Fed chairman Warsh convinced markets again that the Fed will hike if necessary. We question the Fed's real commitment to doing so

Nvidia earnings and outlook reinforced the rebound of hardware stocks and relieved investors doubts for the state of AI.

Monthly performance and current positioning

The HESPER FUND – Global Solutions (T-6 EUR) rose 2.29% as yields climbed, gold rebounded and stocks regained optimism on AI. Total assets rose 1.6% to € 50.3 million. Annualised volatility over the past 250 days edged up to 8.2%, while the annualised return since inception accelerated to 4.01%.

For the month Hesper kept long exposure to equities around 35%, raised gold exposure up to 8%, and maintained long exposure to the Norwegian krone.  The overall short duration stance was stretched slightly up to -1.5 years through a mix of futures contracts on Gilts, OATs, BTPs, JGBs and Treasuries. Short exposure to the USD was increased to 24%.

Outlook:doubts remain regarding the Fed’s inflation commitment

The sharp shift in U.S. economic, political, military, and geopolitical policy culminated in the messy conflict with Iran. We expect the repercussions to be significant, with the potential to reshape the global economic and geopolitical landscape. That said, the resulting oil price shock proved insufficient to derail an otherwise resilient global economy.

Fed chairman Warsh admitted that inflation is not slowing, but yet he declined to support rate hikes in two meetings. Loose US fiscal policy, resilient consumer spandings and a steady labour market raised doubts about the Fed’s commitment to containing inflation ahead of the midterm elections.

Overall, the HESPER FUND – Global Solutions maintains a constructive stance on equities, with a selective approach across regions and sectors. With limited fiscal space and debt at dangerous levels and an inflation outlook less certain in the US, we remain cautious about sovereign bond yields, have further reduced duration to -1.5 years. In foreign exchange, we have increased  ours hort position to the greenback and 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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