Bellevue Global Macro

The fund returned +0.68% in October with a volatility of 6.2%. The MSCI World Index in EUR gained 3.84%, and the Bloomberg Global Aggregate Bond (EUR-Hedged) Index rose 0.60%.

The fund’s main performance contributors were gold (+0.35%), government bonds (+0.23%), equities (+0.06%), and non-government bonds (+0.04%). Financial markets were buoyant, supported by the trade agreement between the US and China and additional announcements of large-scale AI investments. Gold surpassed USD 4,000 per ounce for the first time. Government bonds experienced volatility but ended the month in positive territory, with the German 10-year yield declining by 7.8 bps to 2.63%. The equity investments underperformed the MSCI World Index in EUR due to the Chinese holdings, which had rallied strongly in September. Credit performed in line with broad credit markets.

We reduced the equity exposure from 41% to 33% and gold from 6% to 3% to realize profits. Elsewhere, asset allocation remained broadly stable, with 29% in long-term government bonds, 28% in credit, and 11% in USD exposure. Within credit, we shifted toward higher-quality issuers as the risk-reward profile of high-yield bonds has become less attractive. Portfolio duration was stable at 3.1 years vs the long-term average of 3.7 years. The fund’s main hedges remain its 29% European long-term government bond and 3% gold exposures.

We revised our scenarios on October 31, 2025, as follows:

Base scenario: The US economic locomotive. Economies adapt well to tariffs as shown by resilient data and contained inflation. Trade agreements with key partners removed a major source of uncertainty. US equities outperform on a global scale as other major economies benefit from the US growth locomotive but lack their own growth impulse. Equity markets continue to grind higher. This scenario is neutral for credit and slightly negative for government bonds.

Positive scenario: An asset melt-up. Trump’s pro-growth economic policies begin to take effect. The AI investment boom continues unabated, reinforced by additional investments linked to the trade deals. Europe, Japan, and China follow with expansive fiscal measures. Markets expect governments to pressure central banks to be accommodative. Inflation remains contained in the early phase. Markets price in a stronger global outlook, leading to another leg up in equity markets. This scenario is positive for credit and negative for government bonds.

Negative scenario: Market scare. Elevated valuations make markets vulnerable to a correction. Several factors could act as triggers: AI disappointment, rising stress in private credit, and renewed US-China trade tensions. Equity markets correct by around 20%. This scenario is negative for credit and positive for government bonds, though we apply less hedging value to long-term government bonds.