MIRABAUD (CH) - LPP 45+ L cap. CHF

Performance update

The trade truce between the US and China, as well as ongoing negotiations with Europe, supported equity markets in May. Despite these developments, the geopolitical environment remained highly uncertain, evolving in line with statements from the US Administration. After plummeting in the wake of Liberation Day, US business and household confidence indicators began to show signs of improvement, reinforcing our scenario of no US recession this year. Equity markets were also supported by a solid Q1 earnings season, with the vast majority of US and European companies reporting higher-than-expected earnings.

Within the fund, the main contribution to performance came from global equities, particularly technology, communication and industrial sectors. In the Swiss market, cyclical small & mid-caps benefited from the de-escalation more than highly capitalised names in healthcare and consumer sectors. Swiss and European bonds were also positive due to the disinflationary trend, while bond prices for US Treasuries and Japanese government bonds declined because of inflation expectations and unsustainable debt levels. Close-to-zero interest rates pushed Swiss real estate funds to new all-time highs. Within alternative assets, funds with higher market correlation performed best while commodities declined. Regarding foreign currencies, positive and negative effects largely offset one another.

Portfolio activity

In view of the Swiss yield curve being partially negative again, we reduced duration for Swiss franc bonds. The gold position was increased in response to declining currency credibility, namely for the US dollar. Dollar exposure was reduced to underweight as US politics facilitated currency weakness.