- A month after the American president launched his war against Iran, the White House is having trouble to reach a ceasefire and reopen the Hormuz waterway.
- The war has not been as quick and decisive as the intervention in Venezuela. Disrupted oil and gas flows in the Middle East have sparked an energy shock.
- Central banks are pondering their next steps to cope with the energy shock, as uncertainty about the war’s length remains and inflationary risks mount.
- The global economy is expected to weaken but remain resilient, underpinned by fiscal support, despite acute trade disruptions, uncertainty about the war’s duration, and the erosion of the rules-based international order.
- The HESPER FUND – Global Solutions (T-6 EUR) fell 4.67% in March, wiping out this year gains as stocks slumped, gold plunged and yields rose. Year to date, the fund has advanced 0.31%.
- The HESPER FUND – Global Solutions adjusted its portfolio to navigate war and stagflation fears as the status of ceasefire talks shrouded in uncertainty.
HESPER FUND – Global Solutions macro scenario: The US launched a war against Iran and sparked an energy shock difficult to normalise
The war between the US and Israel against Iran has caused a wider conflagration, exposing American allies in the Gulf, strengthening US adversaries, and disrupting energy markets and economies worldwide.
Unlike tariffs, the US president cannot turn war on and off. Experts warn that he might find himself with no viable peace options. However, amid continuing US threats and force mobilisation, very difficult peace negotiations are already taking place through Pakistan, Turkey and Egypt.
The global economy is facing mounting headwinds as the war in the Middle East pushes price growth higher. The outlook for bonds has worsened considerably. Unfortunately, the war in Iran has cancelled any prospect of a better economic outlook for the world. Most central banks kept rates unchanged in March while assessing the evolution of inflation expectations to eventually raise them.
Monthly performance and current positioning
The HESPER FUND – Global Solutions (T-6 EUR) fell by 4.67%, as equities, bonds and gold were hit by the war. Total assets declined by 6% to € 49.2 million following redemptions. Annualised volatility over the past 250 days rose to 7.5%, while the annualised return since inception fell to 3.6%.
Oil continues to trade at high prices due to doubts over the Iran peace talks. We remain vigilant regarding policy and geopolitical developments. During the month, the fund sharply reduced its duration to less than one year, as loose fiscal policy and higher inflation expectations could drive yields higher. The fund reduced its equity exposure by more than half to 17% and reduced its gold exposure by selling an ETF on gold miners. The fund also increased exposure to commodities up to 6%. On the FX side, we raised exposure to the Norwegian krone up to 50%, as we identified unjustified weakness.
Outlook: Trump struggles to find the endgame
The sharp pivot in US economic, political and geopolitical policy will continue to have a significant impact on the global outlook in 2026. This new era of resource imperialism carries risks. This month, the US took an unusually expansive view of executive power by starting an open war with Iran, which sparked an acute energy shock.
The war against Iran has just cancelled the world’s improving economic outlook after the rift over tariffs. War hits the global economy with higher inflation. Although it’s too early to predict with any certainty, our base scenario remains that the oil crunch is not enough to push the global economy into recession. TACO (‘Trump always chickens out’) impulses are already present, but they are not that easy to implement this time.
In Trump’s world, unpredictable policy is the norm, and we frequently adapt the portfolio to capitalise on or cushion the fallout from his decisions. We therefore avoid large, concentrated bets.
The HESPER FUND – Global Solutions has become highly defensive, reducing exposure to equities and eliminating high-yield investments, while also neutralising duration, given the current extremely high level of uncertainty at present.