Portfolio Manager Update | HESPER FUND - Global Solutions
HESPER FUND – Global Solutions (*)
State: 02/10/26
Key points at a glance
- Global growth remained robust, amid regional differences, underpinned by fiscal support. However, government bond yields spiked to multi-decade highs.
- The US-Iran conflict continues with no end in sight, exacerbating the Hormuz crisis.
- Major central banks raised rates to overcome the energy shock. The dollar strengthened.
- Stocks swung but shrugged off higher bond yields, as the outlook for tech earnings remains positive.
- The HESPER FUND – Global Solutions (T-6 EUR) fell by 1.44% in September, as the gold rebound pulled back and the dollar appreciation hit the fund’s short stance. Year to date, the fund has risen 3.2%.
- The fund maintained a net short duration stance of -1.5 years and an equity exposure of 35%. FX allocation was sharply modified by the end of the month, raising the dollar up to 35% long from a short stance of 25%.
The global bond rout has accelerated
Despite serious geopolitical challenges and conflicts, global growth has held up well, albeit with regional differences, and recession remains off the table.
Fixed-income investors have become weary of the fiscal trajectory of most countries, as inflation remains above target and higher fuel prices and interest rates further increase the fiscal burden. In the Eurozone core, the gap between French and German government bonds widened as investors feared rising domestic vulnerabilities.
After three years, the Federal Reserve raised interest rates, restoring credibility to the greenback.
Tech stocks fluctuated but closed near their highs as earnings growth continued to underpin valuations.
Monthly performance and current positioning
The HESPER FUND – Global Solutions (T-6 EUR) fell by 1.44%, as gold retreated and the dollar appreciated against the euro and the Norwegian krone. Total assets rose by 0.98% to €49.1 million. Annualised volatility over the past 250 days decreased to 8.14%, while the annualised return since inception slowed to 3.8%.
For the month, the fund maintained a long exposure to equities of around 35% and a gold exposure of 8%, The overall short duration stance remained at -1.5 years through a mix of future contracts on Gilts, OATs, BTPs, JBs and Treasuries. In the FX space, we were short on the USD and long on the Norwegian krone. As the ‘sell America’ narrative waned, we adjusted the currency exposure sharply, turning the fund to a 35% long stance.
Outlook: Is France on the verge of a debt spiral?
The sharp shift in US economic, political, military, and geopolitical policy has culminated in the chaotic conflict with Iran. We expect the repercussions to be significant, with the potential to reshape the global economic and geopolitical landscape. Although the resulting oil price shock proved insufficient to derail the otherwise resilient global economy, it is increasing the fiscal burden of many countries after years of very loose fiscal policy. Moreover, higher rates are creating financial pressures.
Overall, the HESPER FUND – Global Solutions maintains a constructive stance on equities, with a selective approach across regions and sectors. Given the limited fiscal space, debt at dangerous levels and an uncertain inflation outlook, we remain cautious about sovereign bond yields, keeping a short duration stance of -1.5 years. In foreign exchange, we have erased the short exposure to the greenback to establish a long position and reduce the exposure to the Norwegian krone.
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