Bellevue Global Income

The Fund returned -2.63% in September with a volatility of 3.8%, compared with -1.80% for the Bloomberg Global Aggregate EUR-Hedged Index.

This month, credit contributed -1.08% and government bonds -1.55%. The month was marked by a rise in long-term government bond yields to levels last seen in the 2000s. The Fund's underperformance versus the Bloomberg Global Aggregate EUR-Hedged Index was primarily driven by its exposure to long-term US Treasuries. In the second half of the month, Treasuries significantly underperformed German bonds, as investors sought safety within the Eurozone amid concerns about France's debt sustainability. The US 10-year Treasury yield rose by +53 bps to 5.28% compared with +26 bps to 3.59% for the Bund. Credit outperformed broader markets, supported by the credit hedges in place.

During September, we modestly increased the credit allocation from 68% to 70%. Ahead of bond redemptions, we invested in a diversified manner, focusing on high carry, low duration bonds. We maintained the 8% short position in the iTraxx Crossover Index. We cut the allocation to long-term government bonds from 38% to zero as we see continued downside risk and the first tier of our risk budget framework was reached. As a result, portfolio duration was reduced from 5.9 to 3.4 years, materially lowering the Fund's sensitivity to a further rise in yields. The Fund offers a EUR yield of 4.5% with an average credit rating of A-.

We modified our scenarios on September 17th, 2026 as follows:

Positive: Energy bottleneck is resolved. AI investment remains strong, supporting corporate capex, productivity and earnings growth. At the same time, tensions surrounding Iran ease significantly, removing a major constraint on global energy supply. Oil prices decline, reducing inflationary pressures and improving the outlook for consumers and businesses. This creates a more supportive environment for global growth and financial markets. The scenario is positive for equities, government bonds and credit.

Base: Resilient growth, stable yields. Economic growth remains resilient, supported by continued AI investment and solid corporate fundamentals. The inflation outlook stabilizes and further central bank tightening is already priced in, keeping long-term yields stable. Equities remain supported by earnings but experience higher volatility. Credit and government bonds benefit from attractive carry.

Negative: Inflation and yields break the market. Iran tensions intensify and renewed pressure on energy supply pushes oil prices higher, adding to already persistent inflation. At the same time, resilient economic growth forces the Fed to tighten monetary policy more than markets expect. Higher rates challenge stretched equity valuations, triggering a correction and wider credit spreads. Negative for equities and credit, while government bonds initially fail to provide effective protection.