Bellevue Global Income

The fund returned -0.2% in August with a volatility of 2.5%, compared to the Bloomberg Global Aggregate EUR-Hedged Index, which was broadly flat at -0.01%.

This month, credit contributed +0.06% and government bonds -0.26%. While concerns around AI faded, continued tensions surrounding the Iran conflict and rising long-term yields to multi-year highs weighed on sovereign bond markets. Credit underperformed broader markets, due to the credit hedges in place. Government bonds remained volatile, amid uncertainty following Kevin Warsh’s FOMC press conference in late July. However, his Jackson Hole speech reassured markets, although this now needs to be followed by action. The Bund underperformed the US 10-year Treasury, with yields rising by 12 bps and 2 bps, respectively, to 3.32% and 4.75%.

During August, we modestly increased the credit allocation from 66% to 68%. We added to the AES USD 7.6% due 2055 hybrid bond, callable in 2029, with a yield to call of 6.7% and a BB rating. We like its risk/reward profile and its focus on building renewable energy capacity in the US and globally. The CSN bonds were downgraded to below B-, with no significant impact on the portfolio. We expect to exit CSN in October, as we anticipate positive news on asset sales. We maintained the 8% short position in the iTraxx Crossover Index. We kept the allocation to long-term government bonds unchanged at 38%. As a result, portfolio duration remained stable at 5.9 years. The fund offers a EUR yield of 4.6% with an average credit rating of A.

We updated our scenarios on June 25, 2026 as follows:

Positive: AI buildout continues. The AI infrastructure investment cycle continues, supporting corporate capex and earnings. Lower geopolitical tensions and the reopening of the Strait of Hormuz reduce uncertainty on energy markets, while lower oil prices ease inflationary pressures. Europe gains momentum through infrastructure and defense spending, with Asia and Japan also benefiting. The synchronized macro backdrop supports equities, government bonds, and credit.

Base: Constructive but questioning markets. Markets continue to recover, supported by resilient economic fundamentals. However, investors remain cautious as questions persist over AI returns, the risk of an overheating US economy, inflation, and Europe’s ability to deliver structural reforms. Overall, the outlook remains positive for equities and slightly positive for credit and government bonds. However, these uncertainties keep volatility elevated. We remain flexible and ready to rotate quickly toward either the positive or negative scenario.

Negative: US overheating triggers a correction. Concerns over AI returns undermine stretched technology valuations as signs of an overheating US economy emerge. Despite easing tensions in the Middle East, renewed geopolitical risks remain possible. Markets begin to price weaker global growth, triggering an equity correction and wider credit spreads. Government bonds initially benefit from safe-haven demand as confidence in the new Fed Chair improves their hedging role.