Portfolio Manager Update | HESPER FUND - Global Solutions
HESPER FUND – Global Solutions (*)
State: 30/06/25
Key points at a glance
- The end of the Israel-Iran war eases geopolitical concerns and shifts the market’s focus back to US policies.
- Trump’s renewed criticism of Powell hits the dollar.
- Trump’s “one, big, beautiful bill” continues to raise concerns about the sustainability of US debt.
- The HESPER FUND – Global Solutions rose by 0.39% in June, as the markets calmed following the end of hostilities in the Middle East. Year-to-date performance is at 0.72%.
- The HESPER FUND adjusted its portfolio frequently in response to an uncertain and sometimes anxious market mood.
Tariff angst roils markets
HESPER FUND – Global Solutions Macro scenario:: Trump continues to attract the spotlight
Nowadays, everything revolves around US President Trump. Wars, peace talks, the budget bill, NATO policy, trade negotiations, and now the early replacement of the Fed chair. The Trump administration remains a permanent source of surprises.
The markets are awaiting the deadline for the pause in tariffs, while the US Congress is fine-tuning a fiscal package that is raising concerns about the bond market. Meanwhile, the US dollar has weakened further as Trump has stepped up his attacks on the Fed and is considering appointing its next chair.
Monthly performance and current positioning
The HESPER FUND – Global Solutions (T-6 EUR) rose 0.39% in June, as we experienced another roller coaster month with a high risk of oil supply disruption and further war escalation. Total assets fell slightly to 51.4 million EUR. Volatility over the past 250 days increased slightly to 6.15%. The annualised return since inception barely accelerated to 3.15%.
The war between Israel and Iran had the world on tenterhooks for 12 days as risks mounted. Oil prices first spiked and then plunged after the US strikes thwarted Theran’s race to develop nuclear weapons. Hesper had to adjust its positions in response to this uncertain and rapidly evolving scenario. During the month, the fund shorted the US dollar, closed its long exposure to the Swiss franc, slightly increased euro duration (to an overall average at 4.7 years) and increased equity exposure up to 40%, with a continued bias towards European equities.
The performance in June (0.39%) was as follows: 0.17% fixed income instruments, +0.29% equities, -0.28% commodities, +0.38% currencies and -0.16% fees and expenses.
Outlook: When the times are changing …. for dealmaking
The aggressive US economic, political and geopolitical policy shift will have a significant impact on the global outlook for 2025 and beyond. The world order is shifting amid a high level of uncertainty. This evolution, partly triggered by China`s economic and technological rivalry with the US, marks a transition from the post-World War II order.
While Trump deals are unlikely to deliver sweeping reforms, the fact remains that the global rules-based order is fading, and the risks to the global outlook are increasing.
International investors, especially in Asian countries, have an increasing number of reasons to consider alternatives to US-based assets. These include a growing budget deficit, increasing political polarization, a high risk of a less independent Fed, and a major geopolitical and diplomatic shift away from the established post-war dynamics.
Trump’s attempt to tear up the economic playbook that underpinned US prosperity for generations is endangering the dollar as the world’s primary reserve currency and denting US Treasuries as the main risk-free asset on which the entire financial system is based. A gradual shift from hoarding dollar assets to doubting US exceptionalism may have already begun.
As a result, we are shorting the US dollar and exploring options for what may be a long-term stealth trend. Due to the current high level of policy uncertainty, we are maintaining low exposure across most asset classes and avoiding large, concentrated bets for the time being.
*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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