Portfolio Manager Update | HESPER FUND - Global Solutions

HESPER FUND – Global Solutions (*)

State: 05/11/25

Key points at a glance

• Trump and Xi ease trade tensions by agreeing a truce on tariffs, rare earths and fentanyl.
• The Fed cuts rates by another 25 bp but Powell poured cold water on hopes for more.
• 30 days after the US government shutdown began, there is still little sign of an agreement between the parties.
• Stocks extended their gains, while gold suffered a pullback from record highs after accelerating rapidly over the last month.
• The global economy remains resilient, underpinned by fiscal and monetary support, as well as AI buildup.
• The HESPER FUND – Global Solutions rose by 1.8% in October as US stocks reached new highs. Year-to-date performance is at 6.03%.
• The HESPER FUND adjusted its portfolio only slightly in response to the improved visibility of the trade-related scenario.

TRUMP AND XI EASE TENSION WITH ONE-YEAR TRUCE

HESPER FUND – Global Solutions Macro scenario: markets quickly shrugged off credit fears

Donald Trump and Xi Jinping agreed to extend the tariff truce, roll back export controls and reduce other trade barriers in a landmark summit, giving markets a more stable footing and sustaining the buoyant sentiment.

Driving in a fog, the Fed trimmed US rates by another quarter point, but cast doubts on a December cut. Eurozone inflation dipped closer to 2% as the ECB held rates.

As the shutdown drags on and Trump flexes his muscles, Congress’s relevance is fading.

The AI frenzy continues to underpin the stocks rally, while anxious investors pushed the price of gold above $4,200 an ounce for the first time, before a recent pullback. Cracks in the private credit arena appeared in the US, but it is difficult to predict whether an extension will occur.

Monthly performance and current positioning

The HESPER FUND – Global Solutions (T-6 EUR) rose by 1.8%, with contribution from all asset classes. Total assets increased to €53.4 million. Volatility over the past 250 days increased to 5.8%. The annualised return since inception rose to 3.81%.

As the macro situation became clearer, the need for rotation positioning diminished, although we remain wary about further policy and geopolitical developments.
During the month, the fund cut its exposure to gold to less than 4%, kept the equity quota at around 47%, adding exposure to nuclear and indirectly playing the AI investment boom through a 10% exposure to the Nasdaq 100. The duration was slightly increased to 7.1 years, and the NOK was actively traded.

The performance in October (1.8%) was as follows: 0.73% for fixed-income instruments, 0.85% for equities, 0.43% for commodities, 0.06% for currencies and -0.26% for fees and expenses.

Outlook: an impending recession is unlikely in a Trump-centric world  

The sharp shift in US economic, political and geopolitical policy will significantly impact the global outlook for the remainder of 2025 and beyond. Countries and corporates worldwide will need to adapt to this new reality. US protectionism is causing a significant shock to global demand.
The goal of strategic independence involves rewiring global economic relationships. The US-China trade relationship can no longer be driven solely by cost and efficiency.
While the US-China reset eases the economic threat posed by high tariffs, key issues remain unresolved. As economies remain resilient, the risk of recession is not on the horizon.

In Trump’s world, policy uncertainty is the norm, so we are maintaining a cautious approach. We are keeping exposure low across most asset classes and avoiding large, concentrated investments.
The HESPER FUND – Global Solutions plans to increase the exposure to gold once the current consolidation phase ends. Activity in the FX space continues to be very dynamic; recently, we opened a 10% long position on the Japanese yen and on the Norwegian krone.
The overall duration of the portfolio has increased to 7.1 years, primarily due to Bunds. The equity quota oscillates between 45% and 50%, with diversification across geography.

*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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