Bellevue Entrepreneur Europe Small

European SMid caps, as measured by the MSCI Europe Small Cap ex-UK Index, declined 4% in June, underperforming European large caps (SXXR +2.6%). Markets saw some profit taking and consolidation in June, but still closed a strong second quarter overall. The US-Iran framework agreement announced on 15 June triggered the gradual reopening of the Strait of Hormuz and a sharp reversal of oil prices. The easing in energy prices reduced the immediate risk of a renewed inflation shock and allowed for a somewhat less hawkish central bank communication. The ECB nevertheless raised rates by 25 bps during the month, while the Fed kept rates unchanged, maintaining a data-dependent stance. The Eurozone Composite PMI improved to 49.5 in June, as a recovery in services (48.9) narrowed the drag on activity, while manufacturing (51.4) remained in expansionary territory for a fifth consecutive month. In terms of sectors, Financials (+1.3%), Consumer Staples (-0.7%) and Utilities (-2.1%) performed best while Communication Services (-9.8%), Materials (-8.2%) and Information Technology (-5.5%) lagged the most.

Against this backdrop, the Fund (B-share, EUR) decreased 2.5%, outperforming its benchmark by 148 bps. YT-June-end the Fund is up 8.9%, an outperformance of 325 bps.

Top detractors during the month were Invisio (-26.5%), Hensoldt (-23.4%) and Bakkafrost (-12.2%). Defence underperformed as easing geopolitical tensions around Iran raised hopes for a more durable de-escalation, leading to a derating of defence-related exposure. Both Invisio and Hensoldt suffered alongside the broader sector. Bakkafrost’s weakness reflected a broader sector move, driven by falling Atlantic salmon spot prices as stronger harvest volumes outpaced demand. Reduced Peruvian anchovy supply linked to El Niño also pushed fishmeal costs higher, raising concerns over further margin pressure.

Top contributors during the month were Polypeptide (+24.1%), Nordex (+11.6%) and DO & CO (+11.9%). Polypeptide was supported by growing speculation around a potential takeover bid from both strategic and financial buyers, alongside a more constructive tone on the ramp-up of its new manufacturing facility. Nordex delivered robust order momentum, notably c.830MW of new contracts in the US. This further validates the group's re-entry into the US market, which offers meaningful MT growth potential and greater geographic diversification. DO & CO delivered record FY25/26 results, with revenue, margins and free cash flow all ahead of expectations, highlighting the resilience of premium catering despite geopolitical disruptions. The FY26/27 outlook was also supportive, underpinned by new airline contracts, the World Cup and continued expansion across lounges and retail.

The Bellevue Entrepreneur Europe Small Fund is celebrating its 15th anniversary. The team is proud of this milestone, not least because longevity and outperformance in active management are by no means a given. Since its launch in 2011, the strategy has achieved an annualized net return of around 11%, equivalent to approximately 5x the initial capital invested. It has also outperformed its benchmark and ranks in the first quartile among peers. During this period, the Fund has weathered the euro crisis, Brexit, COVID-19, the Russian invasion of Ukraine, the 2022 interest rate shock, tariffs and renewed geopolitical tensions. This consistency across varying market conditions reflects the soundness and discipline of the fund’s investment philosophy throughout the years. We would like to thank all our investors for their continued trust and confidence.