Between headlines and reality: how we are managing the current turbulences

The current headlines about surprisingly high US tariffs and the resulting price losses in international financial markets are understandably causing uncertainty. We would like to share with you our view of the current market situation to show that these short-term events do not fundamentally change the overall picture. The fund positioning of the Ethna-AKTIV is designed to balance out exaggerations. True active risk management is at the heart of our work.

Our macro view

1. We agree with US Treasury Secretary Scott Bessent and do not expect a US recession in 2025.
2. The US tariffs announced were surprisingly high, but invitations for talks have been issued.
3. The countries affected by the US tariffs are not unprepared and will react according to the situation and the outcome of the talks.
4. Regional central banks are very vigilant and will ease liquidity constraints if necessary.
5. Both consumers and corporate leaders have already demonstrated their reluctance and preparations for the tariffs.
6. While much of the current situation looks like an escalation, no one is interested in deliberately damaging their own economy in the long term. There will be compromises, which in turn will have a de-escalating effect.

The current positioning of the Ethna-AKTIV

Bonds: Additional futures have enabled a very high duration of 10.7 in the Ethna-AKTIV. Futures are a targeted tool to function as a diversifier in this phase. The duration has already been shortened to 7.7 through initial adjustments. The sale of all remaining US Treasury futures will reduce it to around 6.7. This residual duration comes from the robust and very liquid bond portfolio, where we do not need to make any changes due to its already high quality.

Equities: We hold the usual 28.5% of individual stocks in a well-selected and diversified portfolio, invested exclusively in large, well-known US companies with strong balance sheets and sustainable growth trends. The defensive character is expressed by an overweight in pharmaceuticals and underweight in consumer stocks. We currently hold a neutral weight in technology, media and telecommunications stocks. As we consider the high volatility of the markets and the trend towards deregulation to be beneficial, we are maintaining our positive bias on financial stocks. In addition, approximately 7.5% S&P 500 futures bring the net exposure to around 36%.

FX: We focus on the euro, our fund currency. This helps us to avoid large foreign currency risks. The significant reduction in US dollar exposure some time ago has been very good for the portfolio. We are sticking to it.

Risk management is now a priority

In the current market phase, capital preservation is at the forefront. We reduce risks where it makes sense to do so – and create reserves for targeted investments as soon as attractive opportunities arise.

A high degree of flexibility is a central element of our active risk management. We are acting with a clearly defensive focus and have implemented safeguards (‘ripcords’) in our futures positions to limit potential losses.

The focus is currently on the stock markets. All individual stocks were tested for resilience and the portfolio was adjusted in a targeted manner to the volatile market environment. Should the situation continue to deteriorate, we are prepared to reduce the equity allocation to as low as 25% – a reflection of our consistent, cautious approach.

Adjustments in the bond or currency segments are not necessary at present.

What matters now

We remain vigilant, flexible and ready to act. Capital preservation is our top priority – In this market phase, our approach is to lock in what can be locked in – and to invest when the time is right.

Opportunities can only be sensibly exploited once the current exaggerations are behind us. Until then, the focus is on capital preservation through active risk management.

Reliable. Considerate. Flexible.
This is what ETHENEA stands for – especially now.

Note: This text has been translated by IA. The German version is authoritative.

The content of this page is intended for professional investors only.