Portfolio Manager Update

Macro Navigator

State: 06/02/2026

January was characterized by a mix of geopolitical tensions, stabilizing economic and inflation data, and a wait-and-see stance by the major central banks.

The war in Ukraine remains a key stress factor. Even though there have been conditional advances in talks between the parties to the conflict, the political risk premium remains high. The United States has moved beyond mere rhetoric with regard to Venezuela, Greenland, and, most notably, Iran. While the involvement in South America and the demands concerning Greenland quickly faded from focus, the risk of sudden escalations—particularly in and involving Iran—remains.

Global growth and inflation trajectories continue to follow the trends of recent months: moderate growth alongside gradually easing, yet heterogeneous, inflation. The extensive fiscal packages adopted last year in the United States, Europe, and several emerging markets are increasingly entering the implementation phase over the course of the first half of 2026. For the euro area, inflation rates of just under 2% and real growth rates of around 1% are projected for 2026. In the United States, following a growth slowdown in 2025, stabilization is expected. We even anticipate a growth acceleration well above the expected 2–2.5%. Inflation in the US remains above the central bank’s target, but continues to be well anchored.

Against this backdrop, the major central banks are maintaining their interest-rate pause, focusing on data dependency and avoiding overly aggressive easing. Nevertheless, given the political will to stimulate the labor market, we expect at least two rate cuts by the Fed and assume that the ECB will follow over the course of the year.

Overall, the environment continues to be shaped by high political uncertainty, but also by predictable monetary policy and supportive fiscal policy. In this setting, a focus on quality and selective risk management will be decisive for performance in 2026.

Market Navigator

Bonds / Yields

At the end of January, the yield on 10-year US Treasuries stood at 4.24%, around 7 basis points above the level at the start of the year. The yield curve remained flat to slightly steeper, as several rate cuts were already priced in at the short end. Strong US economic data and solid labor market figures dampened hopes for more aggressive easing by the Fed. Credit spreads developed favorably in January: the US investment-grade spread fell by 5 basis points to 73, while the US high-yield spread remained almost unchanged, declining marginally from 266 to 265 basis points.

The yield on 10-year German Bunds ended the month just 1 basis point below the level at the beginning of the year, at around 2.84%. Declining inflation rates and expectations of cautious but foreseeable monetary easing by the ECB supported demand. At the same time, the fragile geopolitical situation (the war in Ukraine) justifies a safety premium. Spreads in Europe also compressed: EUR investment grade tightened from 78 to 74 basis points, while EUR high yield declined from 281 to 273 basis points.

The market continues to be in solid technical shape. We favor selective exposure to high-quality bonds. After currency hedging, yield advantages of non-European bonds are so small that we are investing primarily within the euro area.

Given anchored inflation and still unconvincing growth expectations, we expect stable to declining interest rates at both the short and long ends of the curve. Therefore, we prefer investments in longer-than-average maturities.

Equities

For investors, January 2026 was a month of contrasts: it began with a continuation of the global record rally but transitioned into a phase of heightened nervousness and significant reallocations. A key feature of January was the increasing market breadth. A clear rotation from highly valued mega-caps into the broader market became evident. In particular, small and mid-cap stocks in the US and Europe showed relative strength, benefiting from lower interest rates and attractive valuations. Profit-taking in the technology sector and a dramatic “flash crash” in precious metals (gold temporarily lost more than 10%, silver over 30%) caused volatility to surge toward the end of the month.

The transition of the AI cycle from pure hardware (chips) toward productivity-enhancing software and industrial applications represents the next step in monetizing this technology. From our perspective, AI will continue to be a key driver of market performance in 2026. Both monetary and fiscal policy remain supportive. Currently, geopolitical tensions and the large divergence in sentiment between retail and professional investors act as negative counterweights.

We remain bullish overall. However, portfolios have been positioned somewhat more neutrally, both in terms of allocation and composition. At present, technology—particularly represented by the “Magnificent 7”—is underweighted.

Currencies

The US dollar (USD) experienced a rollercoaster ride in January 2026, driven mainly by political headlines and a temporary crisis of confidence in the independence of the US Federal Reserve. While EUR/USD traded at around 1.17 at the beginning of January, it rose temporarily above 1.20 before stabilizing at approximately 1.185 by month-end.

The “dollar dominance” of previous years appears to have been dampened for the time being. Several negative factors are currently at play: in addition to the narrowing interest-rate differential, geopolitical noise surrounding US tariffs and other unusual diplomatic initiatives has weakened confidence in the dollar as a “safe haven.” Supporting factors include the recently strong US economic data and the nomination of Kevin Warsh—generally viewed as a hawkish monetary policymaker—as the new Fed Chair. We also view it positively that a weaker US dollar is now expected by the majority of market participants.

The future development of the US dollar remains unclear to us. For this reason, we have slightly reduced the increased allocation built up in the fourth quarter of last year and are now awaiting an assessment of upcoming macroeconomic data.

Ethna-DEFENSIV

State: 06/02/2026

Key points at a glance

• Positive monthly performance of +0.80% in a stable interest-rate environment
• Bond allocation increased significantly from 89.4% to 95.4%; cash reduced to 4.6%
• Duration stable at 8.2, with a preference for longer maturities (10–15 years)
• Focus on corporate bonds: increase from 65.7% to 71.6%, concentrated on financials and utilities
• Selective high-yield rotations toward higher-rated issuers (BB segment)

While the ECB continued its policy rate pause and the Fed also left rates unchanged at the end of January, yields on 10-year German Bunds remained stable between 2.6% and 2.8%. We used this environment to significantly increase the bond allocation from 89.4% to 95.4%, while simultaneously reducing the cash allocation from 10.6% to 4.6%. This positioning reflects our assessment that current yield levels continue to offer attractive entry opportunities, especially as interest rates are expected to remain broadly stable with a downward bias in 2026.

Our focus was on corporate bonds, where we increased the allocation from 65.7% to 71.6%. Within this segment, we concentrated on the financial sector (26.3%, previously 24.1%) and utilities (17.7%, previously 15.7%)—sectors characterized by stable cash flows and investment-grade quality. Government bond exposure was increased moderately to 16.7%. In the high-yield segment, we carried out quality-oriented rotations, reducing lower-rated B positions and adding higher-rated BB securities. Duration remained stable at 8.2, with a continued focus on the 10–15 year maturity segment (35.0%).

Currency risk increased slightly to a net USD exposure of 4.5%. This was driven by opportunistic single-name purchases, such as Oracle in the technology sector. The portfolio remains strongly EUR-focused, with 95.5% denominated in euros.

The cash allocation declined significantly from 10.6% to 4.6%, as funds were consistently deployed to expand the bond allocation. Given the constructive market environment at the start of the year, investing the liquidity appeared appropriate. The remaining 4.6% cash continues to provide sufficient flexibility for short-term tactical adjustments. With a yield to maturity of 4.1% and an average rating firmly in the A range, Ethna-DEFENSIV offers attractive income with controlled risk in an interest-rate environment that is expected to remain stable.

Ethna-AKTIV

State: 06/02/2026

Key points at a glance

• MtD/YtD performance Ethna-AKTIV (T): 2.18%
• Bond allocation: 46.9%
• Modified duration: 9.8, average rating: A– to A
• Gross equity exposure: 38.3%; net equity exposure: 35.6%
• Currency risk: 21.1% (18.3% USD, 2.3% CHF, 0.5% KRW)

The bond portfolio of Ethna-AKTIV is characterized by high quality and a relatively long average maturity. Over the course of the month, the composition changed only marginally. The 12.7% allocation to government bonds consists of EU-issued bonds with maturities between 2039 and 2045. The majority of corporate bonds are also EUR-denominated; only 10.4% of the bond portfolio is denominated in USD. With this composition, an attractive yield to maturity (YTM) of 4.3% is achieved in our view. At current spread levels, we are not willing to make further compromises on credit quality in exchange for higher yields. The contribution to monthly performance amounted to 0.34%. The relatively high cash position of 12.1% will be invested in short-dated government bonds in the near term.

The equity portfolio was the main performance driver in January, contributing 2.63% to fund performance. Around 80% of the equity portfolio continues to consist of US equities. During the month, several risk-reducing measures were implemented. On the one hand, the net equity exposure—raised at the beginning of the month—was reduced through sales and put options (~10% notional) to a fund-neutral level of around 35%. On the other hand, exposure to highly valued technology stocks was further reduced. This was not due to a lack of optimism, but rather a response to increased market volatility.

Ethna-AKTIV is gross invested 41.4% in USD-denominated equities and bonds. After hedging, USD exposure stands at 18.3%. Due to the renewed phase of weakness in the greenback, the hedge ratio was increased by approximately 5% during the month. As we see no clear direction for the US dollar, we maintain the hedge at around two-thirds of the US equity exposure.

Ethna-DYNAMISCH

State: 06/02/2026

Key points at a glance

• MtD/YtD performance Ethna-DYNAMISCH (T): 5.24%
• Gross equity exposure: 84.9%; no derivatives
• Bond allocation: 0.4%; cash: 13.4%
• Currency risk: 31.3% (21.4% USD)

Ethna-DYNAMISCH follows a thematic investment approach. In addition to AI-related themes, the portfolio selectively invests in sectors such as energy supply, defense/aerospace, and companies potentially involved in the reconstruction of Ukraine. This approach generated a performance contribution of 6.29% in January.

Toward the end of the month, the portfolio’s comparatively high beta was reduced in response to both strong performance and increased market volatility. In particular, large-cap technology stocks were reduced. At the same time, an additional reduction in overall exposure was implemented across all themes. In total, exposure was reduced by more than 13% from the mid-January peak.

The released cash of 13.4% will be invested in short-dated government bonds in the near term. Currently, the bond portfolio consists solely of a KfW bond representing 0.4% of assets.

On a gross basis, Ethna-DYNAMISCH is invested 31.8% in USD-denominated equities. After hedging, USD exposure amounts to 21.4%. Due to the renewed weakness of the US dollar, the hedge ratio was increased by approximately 5% during the month. As we see no clear direction for the US dollar, we maintain the hedge at around two-thirds of the US equity exposure.

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