Bellevue Global Macro

The Fund returned 1.01% in January with a volatility of 3.5%. Over the same period, the MSCI World Index (EUR) gained 1.09%, while the Bloomberg Global Aggregate Index (EUR-hedged) rose 0.11%.

The main contributors to performance during the month were gold (+0.55%), equities (+0.29%), non-government bonds (+0.24%), government bonds (-0.01%), and foreign exchange (-0.06%). Financial markets were volatile, driven by Trump-related geopolitical tensions and shifting expectations regarding future Fed policy.

Government bonds benefited from the long position in German Bund futures; however, this was more than offset by the long German Bund/short French 10-year government bond position. Credit outperformed the broader market, supported by emerging markets exposure and financials. Equity investments outperformed the MSCI World Index (in EUR), driven in particular by Chinese IT stocks and AI-related companies. Gold reached new all-time highs during the month but also experienced heightened volatility.

In January, we increased equity exposure from just under 24% to 28%, further diversifying the equity allocation and seeking to participate in the upward trend in Japanese equities. At the same time, given elevated short-term volatility, we remain cautious and are waiting for more attractive entry points to benefit from a macroeconomic backdrop that we continue to view as supportive. In government bonds, we exited the Germany vs France spread trade, as markets reacted positively to the adoption of the French budget, despite the associated compromise to the country’s growth-supporting capacity. Throughout the month, the credit allocation was kept unchanged at 34%.

Following the recent period of volatility, we reduced our gold exposure to below 5%, despite its overall positive contribution, thereby realizing profits. In light of increased geopolitical uncertainty and the heightened involvement of the United States, we have largely reduced our US dollar exposure.

Portfolio duration was maintained at 2.9 years, compared with a long-term average of 3.7 years. The fund’s main hedges consist of a 25% allocation to European long-term government bonds, a 5% gold allocation, and a 2% long position in S&P 500 Index put options.

Base scenario: Broadening Growth. Despite the new tariff regime, economic data are developing better than expected, with signs of recovery from Europe, particularly Germany. Structural growth drivers such as AI and rising defense spending remain intact, although uncertainty surrounding US trade policy is increasing equity market volatility. Equity markets continue to grind higher, but returns are more volatile. Slightly positive for credit, slightly negative for government bonds.

Positive scenario: An asset melt-up. A strongly supportive economic policy mix accelerates global growth, driven by fiscal stimulus, deregulation, and affordability measures. Europe, Japan and China also adopt more aggressive growth-oriented policies. A newly appointed, more dovish Fed Chair supports additional rate cuts. Inflation initially remains moderate thanks to productivity gains. Markets price in a stronger global outlook, leading to another leg up in equity markets. Positive for credit, negative for government bonds.

Negative scenario: Market scare. Elevated valuations leave markets vulnerable to a correction. Disappointments related to AI, stress in credit markets, and erratic US policymaking could trigger a pullback. Equity markets correct by around -20%. This scenario is negative for credit and positive for government bonds. However, we question the hedging effectiveness of long-term government bonds and assign them a reduced protective role.