Portfolio Manager Update

To the latest Market Commentary

Macro and markets at a glance

State: 06/07/2026

Here’s what you should keep an eye on this month

• The global economy remains robust, despite geopolitical risks. However, growth is slowing.
• Inflation is likely to have peaked.
• Central banks remain cautious, even though falling energy prices are easing the pressure somewhat.

In June, the macroeconomic environment was once again shaped more by geopolitics, energy prices and the response of central banks than by traditional economic indicators. Despite the ongoing conflict in the Middle East, which has now lasted more than three months, the global economy has proven to be remarkably resilient. The impact on the global oil supply has remained manageable, thanks to record-high US exports, weaker Chinese oil demand and the release of strategic oil reserves.
At the same time, however, the global economy presented a mixed picture. While the US economy was buoyed by robust corporate demand, inventory build-up, defence-related contracts and investment in AI and data centres, Europe and China lost momentum. Services sectors in particular remained vulnerable as fragile labour markets, pressure on real wages and subdued consumer confidence dampened demand.

Although the provisional US–Iran agreement provided some relief, the situation remains fragile. The risk of renewed tensions in the oil and gas markets persists. Furthermore, the tightening of US trade policy, with import duties of 10–15%, is putting additional strain on global supply chains and will likely prolong the upward pressure on the prices of imported goods.

Key conclusions:

From our perspective, the outlook for growth and inflation is positive. Continued expansionary fiscal policy, increased defence spending, and investment in the AI sector to boost productivity are providing support. However, governments' room for manoeuvre is limited due to high deficits and increased debt levels. While growth in the second half of the year is likely to fall short of initial expectations, it should be underpinned by a broader industrial upturn, more stable business sentiment, and a gradual recovery in employment.

The tone regarding inflation is somewhat more relaxed than it has been recently. The fall in energy prices since the height of the escalation in the Middle East has eased the immediate pressure, and there are strong indications that the peak of inflationary pressure may already have been reached. However, robust demand for goods, bottlenecks in AI infrastructure expansion, higher import prices resulting from new tariffs, and persistent second-round effects suggest that inflation is likely to remain above target levels for some time. Accordingly, in June, the central banks of industrialised countries adopted a noticeably more restrictive tone. Interest rate rises by the ECB and the Bank of Japan, as well as the US Federal Reserve pausing tightening, underscore that price stability is once again a key priority.

Our base scenario therefore remains positive but challenging: the global economy is continuing to grow, albeit more slowly and unevenly, while inflation is gradually easing and monetary policy is likely to remain cautious to restrictive for some time.

Asset classes

Bonds / Yields

The bond market remained stable throughout the month, with the most significant movements occurring at the short end of the US yield curve. Although risk premiums widened only marginally compared with the previous month, they remain at historically low levels. Overall, the interest rate picture remained calm: while eurozone yields were stable or trending slightly downwards, US short-end yields rose by around 10 basis points. This development highlights that interest rate movements are currently being driven more by central banks' management of market expectations than by changes in inflation expectations. Notably, the first meeting of the new Fed Chair, which adopted a more hawkish stance than anticipated, prompted adjustments to short-term interest rates.

Summary/Outlook

In our view, interest rates have peaked. Against a backdrop of firmly anchored inflation expectations, we anticipate a fall in yields in the medium term. However, the scope for a further narrowing of risk premiums appears limited, and there are currently no signs of sustained stress spreading.

Equities

In June, the upward trend in the stock markets became increasingly broad-based. While the dominant technology stocks of recent months – particularly the so-called 'Magnificent 7' – experienced a period of relative weakness, market leadership shifted increasingly to other sectors. This rotation meant that the rally was placed on a significantly broader footing. Nevertheless, the overarching theme remains unchanged: the AI investment boom. The momentum of this boom is particularly evident in the performance of the Philadelphia Semiconductor Index. The index rose by around 5% in June, bringing its year-to-date return to almost 100%. European equity markets also remained robust, recording their strongest quarter since late 2020.

Summary/Outlook

We expect volatility to increase over the summer. Market expectations for the upcoming earnings season seem rather ambitious. In particular, the broader AI sector increasingly appears to be 'priced for perfection'. At the same time, political factors such as the upcoming US midterm elections and renewed tensions in the Middle East could cause setbacks at any time. Nevertheless, we believe the overarching upward trend remains intact and we are maintaining a positive strategic outlook. However, we have implemented tactical hedging via short-term put spreads.

Currencies

The US dollar appreciated slightly over the course of the month, though no clear trend emerged from this. Overall, the foreign exchange market remains characterised by a lack of momentum, with movements predominantly taking place within narrow ranges. There were no sustained drivers on either the interest rate or geopolitical fronts that would have favoured a clear directional move.

Summary/Outlook

The argument that the interest rate differential between the US and the eurozone is narrowing is becoming increasingly significant. Looking ahead, this suggests a weakening of the US dollar. Furthermore, as tensions in the Middle East continue to ease, a key factor supporting the US dollar is likely to disappear. Even within the context of the 'dollar smile' theory, a moderate global growth environment tends to favour a weaker US currency. Against this backdrop, we continue to anticipate structural dollar weakness and are hedging the associated currency risk wherever possible.

Ethna-AKTIV

State: 06/07/2026

Key points at a glance

• Slightly negative monthly performance of -0.33% (YTD: 6.27%)
• 8% bond allocation (Ø rating of A to A+); 14.1% cash allocation
• Modified duration: 11.8 (including an overlay of +1.8)
• 30% gross equity allocation. After taking into account option hedging, the net equity allocation is 19.1%
• 4% currency risk (2.8% USD, 1.1% JPY and 0.5% CHF)

Bonds: A broader base and a longer duration

In June, the bond portfolio expanded from 53 to 58 securities, while the average rating remained unchanged (from A to A+). A SpaceX bond maturing in 2046 was purchased, as well as a new NTT Finance bond maturing in 2038, amongst other things. The position in Australia Pacific Airports, maturing in 2036, was also increased. The modified duration of the core portfolio remained at 10.0. Due to the slightly higher contribution from the overlay, the total duration increased to 11.8. As we anticipate lower EUR interest rates, we are using derivatives on 30-year German government bonds. The USD allocation in the bond portfolio remained unchanged at 3.1%. The 13.3% of government bonds in the portfolio are exclusively from European issuers.

Shares: Hedging has been established using index options

At 30%, the gross equity allocation is close to the level seen in May. The portfolio has grown slightly to include 21 stocks. However, the more significant transaction was the purchase of S&P 500 put options, which was initiated in June. This derivative hedge has reduced the net equity allocation by 10.9% to 19.1%, which is a direct implementation of the more cautious positioning announced in May in light of ongoing market volatility. At the individual stock level, large mega-cap positions (NVIDIA, Amazon, Alphabet and Meta) were reduced slightly over the course of the month, while defensive or value-oriented stocks such as CVS Health, Ecolab, Visa, Starbucks and DoorDash were purchased selectively. The estimated P/E ratio of the equity portfolio for the coming year is 19, with an estimated dividend yield of 1.2%.

Currencies: Further reduction of FX risk

Overall currency risk decreased from 7.2% in May to 4.7% in June. Exposure to the JPY fell from 2.7% to 1.1%, while the previous 1.7% position in KRW was completely closed out. Exposure to the USD remained virtually unchanged at 2.6% following hedging. The expectation of long-term USD weakness remains unchanged.

Ethna-DEFENSIV

State: 06/07/2026

Key points at a glance

• Positive monthly performance of 0.99% (YTD: 1.82%)
• Bond allocation remained virtually unchanged at 96.9%, with a cash allocation of 3.3%
• High-yield allocation down slightly to 5.4% (previous month: 5.9%), with selective rotation within the investment-grade portfolio
• Modified duration: 10.0 (including an overlay of +1.0)

Strategy and portfolio: Consistency in quality and focus

The fund’s basic structure – quality-oriented, long-term and euro-dominated – remained unchanged in June. The duration overlay via the Bund Future was slightly expanded, raising the portfolio’s modified duration from 9 to 10.

The bond ratio remains at the previous month’s level of 96.9%, spread across 96 positions. Trading volume remained low. An older NTT Finance bond (2037) was swapped for a more recent issue (2038, BBB+), while positions in Bank Gospodarstwa Krajowego (2035) and Diageo Finance (2035) were moderately reduced. A new position in the high-yield segment was added at the end of the month: Vedanta Resources 2034 (BB-, USD). The top positions – the EU bonds 2040 and 2039, as well as the EDF Green Bond 2045 and EnBW 2036 – remained virtually unchanged in terms of weighting and composition. The portfolio remains clearly focused on long-dated, euro-denominated, investment-grade bonds. Over 85% of the bonds do not mature until 2035. The average rating remains in the A- to A range. AAA-rated bonds account for 17.7%, whilst BBB-rated bonds account for approximately 32.4%.

The high-yield segment declined slightly by 0.5% to 5.4%, remaining predominantly positioned in the BB category in line with the fund’s defensive and conservative strategy. There are still no plans to increase the high-yield allocation on a structural basis. The Vedanta holding should be considered a one-off, low-volume addition to the portfolio

Ethna-DYNAMISCH

State: 06/07/2026

Key points at a glance

• Negative monthly performance of -3.33% (YTD: 7.64%)
• 62% gross equity allocation; no derivatives
• 2% bond allocation (short-term AAA bonds); 6.9% cash allocation
• 7% currency risk (4.4% CHF, 2.6% JPY and 1.7% USD)

Equities: Maintain a more defensive stance

The fund's thematic approach was impacted by the sector rotation that occurred in June. Nevertheless, we consider the need for adjustment to be minimal. While there were no changes to the identified themes, minor adjustments were made at the individual stock level. The number of stocks was reduced from 36 to 34, while the gross equity allocation increased from 59.1% to 62%. At the same time, the bond allocation increased significantly from 21.5% to 32.2%, though this was achieved exclusively through short-term, AAA-rated government and agency bonds. This shift from cash into short-term, high-quality bonds should be viewed as a liquidity management measure rather than an investment in duration. Consequently, the fund held 6.9% in cash at the end of the month.

Currencies: Exposure to the CHF increased, while exposure to the USD is still hedged

The Ethna-DYNAMISCH fund is currently 56.7% invested in US dollar-denominated equities, up from 53.1% last month. After hedging, USD exposure stands at just 1.7%. This reflects the consistent implementation of the expectation of structural USD weakness. Meanwhile, JPY exposure remained stable at 2.6%, and the Swiss franc position increased from 2.8% to 4.4% through a single-security transaction.

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