Portfolio Manager Update | HESPER FUND - Global Solutions
HESPER FUND – Global Solutions (*)
Key points at a glance
- Donald Trump returns to power with an ambitious and aggressive agenda aimed at profound changes both domestically and internationally.
- Trump’s constant trade remarks, unexpected communications and the wave of executive orders are unsettling markets, domestic institutions and foreign governments.
- China continues to signal bold stimulus measures while weighing how to avoid potential tariffs and prepare for trade negotiations.
- The HESPER FUND – Global Solutions rose by 1.24% in January, as stocks, the dollar and gold supported performance.
- The HESPER FUND refined its portfolio allocation. The net equity exposure was increased to 35%. The overall duration stance was sliced to 1.5 years. In FX, the dollar pure* exposure was almost halved to 28%. Gold exposure was increased to 8%.
31.01.25 - Trump returns to power with an ambitious and aggressive agenda
HESPER FUND – Macro Scenario: volatility is here to stay as Trump runs the US presidency
Tariffs are the main tool the US administration will wield to reshape supply chains, shrink trade deficits, and reposition itself against countries that Trump perceives as taking advantage of the US.
Meanwhile the US economy has continued to expand at a solid pace in the fourth quarter (2.3%), driven by strong consumer demand that offset drags the from Boeing strike, leaner inventory investment and foreign trade frontload. The labour market is solid, and the unemployment rate has stabilized at low levels in recent months. However, as the Fed admitted last Wednesday, inflation remains somewhat elevated, and there is considerable uncertainty about the administration’s future fiscal, trade, immigration and regulatory policies. Therefore, with healthy growth, it makes sense for the Fed to remain on a wait and see approach.
On the other hand, the global economy is set for a soft landing amid worrying geopolitical developments, concerns about the new US stance on trade and other issues.
Monthly performance and current positioning
their rally and gold reached a record high. Total assets fell to 55.5 million Euro. Volatility over the past 250 days ticked up to 6.5%. The annualised return since inception accelerated to 3.48%.
During the month, the fund shortened the duration to 1.5 years as yields started to climb on concerns about US tariffs. Equity exposure was raised to 35%. Due to higher exchange rate volatility, the fund reduced its dollar exposure to 28%*, although we remain keen on the dollar.
January’s performance (+1.24%) was made up as follows: +0.16% fixed income instruments, +0.65% equity futures, +0.46% commodities, +0.12%% currencies and -0.15% fees and expenses.
Outlook: Trump barrels toward tariff showdown
The resilient overall global performance masks significant differences across regions and countries and is surrounded by important downside risks and uncertainties. The performance of the productivity driven US economy has again surprised on the upside and is likely to continue driving global growth. Expansion in Europe has slowed markedly amid political uncertainty, and China has committed to further aggressive stimulus to fix its ailing economy.
The world is bracing itself for a new US administration that wields instruments of economic warfare to achieve its geopolitical and economic goals. The neo-liberal globalization is giving way to a new global era rooted in nationalism. This new scenario has increased risks and uncertainties for the world economy and financial markets.
We remain bullish on the US dollar, as trade tariffs and fiscal policy are the main transmission mechanisms that will foster the relative strength of the US economy versus the eurozone. However, we remain vigilant as we see challenging times ahead for the Fed under the Trump administration. The outlook for equities remains constructive in the short term, despite the fact that the Fed will not be as accommodative as the market had previously expected. The outlook for the bond market is highly uncertain.
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