Bellevue Global Macro

The fund returned -0.02% in October. Over the same period, the MSCI World Index (EUR) gained 0.91%, while the Bloomberg Global Aggregate Index (EUR Hedged) rose 1.62%. Government bonds were the main positive contributor (+0.55%), while equities detracted (-0.51%). Credit (-0.03%) and commodities (-0.05%) had a slightly negative impact.

Market sentiment in October was shaped by increasing concerns over AI-related investments, renewed European sovereign stress and geopolitical tensions. Equity markets saw a rotation away from technology stocks towards broader market segments, as investors increasingly questioned the returns on substantial AI investments. The Fund's equity exposure was negatively affected by the sell-off in technology and AI-related stocks, while government bonds benefited from declining yields as expectations for further monetary tightening eased. The fund's credit exposure held up relatively well compared with broader credit markets, supported by the hedges in place.

Against this backdrop, we maintained the fund's equity allocation at approximately 42%, while reducing our exposure to US technology amid weakening momentum in AI-related stocks. On the credit side, we kept our allocation broadly unchanged at approximately 37%. Within government bonds, we increased portfolio duration to approximately 3.8 years, as we considered entry levels attractive. We also opportunistically traded French government bonds during the month. We maintained our 1% gold position and increased the Fund's USD exposure from approximately 30% to 34%.

We modified our scenarios on October 30th, 2026 as follows:

Positive: AI investments remain strong and the energy bottleneck is resolved. AI spending supports productivity and earnings, while easing Iran tensions improve energy supply. This creates a more supportive environment for global growth and financial markets and could support equities, government bonds and credit.

Base: Resilient growth, rising concerns about AI financing. Economic growth remains resilient, supported by AI investment and solid corporate fundamentals. Inflation stabilizes, with further central bank tightening priced in, keeping long-term yields steady. Concerns about AI financing increase volatility, although earnings continue to support equities. Credit and government bonds benefit from attractive carry income.

Negative scenario 1: Growth concerns return amid sticky inflation. Slowing AI investment weakens growth and earnings. Iran tensions and high oil prices sustain inflation, limiting central banks' ability to ease monetary policy. Equities fall and credit spreads widen. Government bonds initially benefit from safe-haven demand, but persistent inflation threatens their protection.

Negative scenario 2: Inflation and yields break the market. Escalating Iran tensions lift oil prices and inflation. Resilient growth prompts the Fed to tighten more than expected. Higher rates put pressure on stretched equity valuations, potentially triggering an equity correction and wider credit spreads. Rising inflation concerns and yields also weigh on government bonds. This scenario could therefore adversely affect equities, credit and government bonds.