Bellevue Global Macro

The fund increased by 2.25% in May, with a volatility of 7.0%. Over the same period, the MSCI World Index (EUR) rose by 5.09%, while the Bloomberg Global Aggregate Index (EUR-Hedged) increased by 0.49%.
The main drivers of performance during the month were equities (+2.03%), government bonds (+0.38%), non-government bonds (+0.27%) and gold (-0.11%).

Market sentiment improved during the month as investors became increasingly hopeful that tensions surrounding the Iran conflict would ease further. This was accompanied by a sharp decline in oil prices, which supported risk assets. Equities benefited most, with the S&P 500 reaching new all-time highs, supported by continued optimism around AI-related investment. Government bond yields remained volatile but recovered towards month-end as inflation concerns eased again.

Against this improved backdrop, we positioned the portfolio more constructively and increased the equity allocation further from 33% to 48%. Within equities, we added to strategies exhibiting strong price momentum, including semiconductor stocks and German small-cap equities, supported by continued AI-driven investment spending and lower oil prices. We also further increased exposure to regions that had been more adversely affected by the Iran conflict, such as Japan and Europe, to participate in the ongoing recovery. Nevertheless, given the fluid geopolitical backdrop, we remain prepared to adjust our positioning rapidly should the conflict intensify again.

Given the continued volatility in gold prices and the absence of a clear directional price trend, we reduced the gold allocation from 3% to 2% towards month-end.

On the credit side, we kept the allocation broadly stable at 36%. Despite credit hedges remaining in place, credit performed in line with broader markets, supported by last month’s investments and a catch-up in Brazilian credit positions.

We viewed the rise in government bond yields over the past months as an attractive tactical entry opportunity. Consequently, we increased our exposure to longer-dated government bonds, adding positions in Japan and the US alongside our existing holdings. This reflects our expectation of further support from lower oil prices and the potential for bond yields to decline towards levels observed prior to the Iran conflict.

As a result, portfolio duration increased from 2.3 years to 4.6 years, compared with a long-term average of 3.7 years.

We maintained our scenarios as follows:

Base scenario: Contained conflict. The conflict has entered a lower-intensity phase, with attacks becoming less frequent and less severe. Oil supply disruptions ease and the global economy, which started the year in a constructive position, absorbs the shock relatively well. Inflation rises temporarily due to higher oil prices, but central banks look through it and avoid aggressive tightening. Equity markets remain range-bound and volatile. This scenario is slightly negative for credit and government bonds.

Positive scenario: Rapid de-escalation. The conflict de-escalates faster than expected, whether through the reopening of the Strait of Hormuz, a weakening of the Iranian regime, or regime change. Oil prices fall back toward pre-war levels, removing inflationary pressure before it becomes entrenched. Underlying economic resilience and structural drivers reinforce confidence.
Investors adopt a «buy the dip» stance. Equity markets recover sharply. This scenario is positive for credit and slightly positive for government bonds.

Negative scenario: Oil shock. The conflict remains intense, materially disrupting oil supply and driving a sustained rise in oil prices. The resulting energy shock pushes inflation higher. Central banks face a difficult trade-off and are hesitant to act decisively. Markets begin to price in higher long-term inflation and a global economic slowdown. Equity and credit markets correct.
Government bonds are pressured as the inflationary backdrop keeps upward pressure on yields.