The investment letter - December 2025

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Equity market:

December  saw a continuation of the trends observed throughout 2025. European indices  climbed +2.7% (MSCI Europe NR +19.4% in 2025), while US indices remained  stable. Europe's stock market outperformance vs. the US in 2025 stood at  +14.0% (in euro), a record since 2006.
In Europe, the two best-performing sectors of the month were also the two  best-performing sectors of the year. The banking sector rose +7.9% in  December and posted a +74.6% performance in 2025 (net return). The basic  resources sector (mainly mining and metals) climbed +10.3% in December  (+32.1% net return in 2025).
The year 2025, which was again very favourable for the Momentum factor, can  be divided into two distinct stages. The first half of the year proved  particularly favourable in Europe for the “domestic” and Value sectors,  against a backdrop of a sharp rise in the euro, as well as for the Industry  sector, which was buoyed by the investment plans announced in the areas of  defence and energy independence. The second half of the year saw more  diversified momentum, along with a stabilisation of the euro vs. the US  dollar. Banks continued to perform well (the only European sector to  outperform the overall index in both semesters of 2025) and shared the  spotlight with export-oriented and/or defensive themes that had been  neglected in the first half of the year.
Our economic momentum indicator, which has been signalling an expansionary  environment in Europe for nearly three years, is beginning to show signs of  fading in this context. It would not be surprising to see a shift toward a  contractionary environment in the coming months unless the ECB surprises by cutting  rates while the US Fed continues to act.

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Fixed income market:

The  year 2025 concluded with exceptional momentum for credit markets, highlighted  by solid performances from the Bloomberg GlobalAgg EUR and Global High Yield  EUR indices, which returned -0.4% and 0.6% respectively in December, bringing  their annual gains to 2.7% and 7.8%. This trajectory was bolstered by a  historic easing of volatility in U.S. Treasuries, as Bank of America’s MOVE  index hit its annual low in December, aligning with the tightening of spreads  between High Yield and Investment Grade debt. This climate of confidence is  largely supported by the perception that managing public debt has effectively  become the Federal Reserve's "third mandate" alongside inflation  and employment, fueling appetite for risk assets. Consequently, the FTSE Global  Convertible EUR index surged by 20.6%, outperforming the already robust 16.7%  return of the MSCI World. Beyond this strong performance, the convertible  bond market saw activity approach its 2001 historic peak with $166 billion in  new issuances, a volume driven primarily by the United States and Asia. This  resurgence is heavily dictated by the massive investment cycle in AI, which  accounts for 70% of U.S. issuances. This theme now permeates the entire  economy, ranging from the utilities sector—meeting the immense power demands  of servers—to data storage infrastructure and memory design. Ultimately, this  abundance of new paper was seamlessly absorbed by the market throughout the  year.

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Digital StarsEurope Acc posted a +4.4% return in December, vs. +2.7% for the MSCI Europe NR.Over the course of the year, the fund has achieved a +24.4% return,outperforming its index by +5.0%.

The year 2025was dominated by the theme of sovereignty, particularly in terms of defence(Rheinmetall, Kongsberg), and by that of asset revaluation of undervaluedassets, which was particularly strong in the banking sector (BPER, BancaMediolanum). The rally in metals (Fresnillo, Pan African Resources) continuedinto December, to the point where the sector ultimately contributed most to thefund's outperformance in 2025. The underweighting of the defensive healthcareand consumer staples sectors also contributed positively in relative terms.Conversely, IT and travel/leisure weighed on the fund, particularly at the endof the year.

The portfolioreviews carried out in December have mainly increased our positions in thematerials sector, and reduced those in finance.

Digital StarsEurope is significantly overweight finance, as well as materials, and remainsunderweight healthcare and consumer staples.

The UKremains the fund's top country weight with 20.7%, ahead of Italy at 13.6%(largest country overweight) and Germany at 11.7%. France drops to 5.9% andremains the largest country underweight.

Digital StarsContinental Europe Acc ended December at +3.3%, vs. +2.7% for the MSCI Europeex UK NR. Since the start of the year, the fund has ended up +26.0%,outperforming its index by +6.5%.

The year 2025was dominated by the theme of sovereignty, particularly with regard to defence(Rheinmetall, Kongsberg), and by the revaluation of undervalued assets, whichwas particularly strong in the banking sector (BPER, Société Générale, BPM).The materials sector continued to stand out in December, particularly inchemicals (Alzchem). The underweighting of the defensive healthcare andconsumer staples sectors also contributed positively in relative terms.Conversely, technology and real estate weighed on the fund, particularly at theend of the year.

The portfolioreviews carried out in December have mainly increased positions in thematerials (metals) and utilities sectors, and decreased the industry sector.

Digital StarsContinental Europe is mainly overweight in finance. The fund is underweight inconsumer staples and healthcare.

Germanyremains the fund’s largest country with a 14.4% weight, ahead of Italy at 13.6%(the most overweight country) and Switzerland at 12.5%. France drops to 9.5%and remains the most underweight country.

Digital StarsEurozone Acc posted a +2.7% return in December, vs. +2.4% for the MSCI EMU NR.Since the start of the year, the fund has posted a +27.4% return and hasoutperformed its index by +3.7%.

In December,the fund benefited from its favourable positioning, both sectorally andgeographically. In particular, it benefited from its overweight position inrenewable energies (Solaria Energia y Medio Ambiante), banks and IT (hardware).This month marks the end of a year of strong outperformance, driven by themesrelated to sovereignty (defence, electricity generation, etc.) and to therevaluation of undervalued assets such as the financial sector as a whole.

The portfolioreviews carried out in December were diversified, mainly increasing thepositions in the finance and healthcare sectors. Among the exits were mainlyconsumer discretionary stocks.

The financesector becomes the fund's main overweight, right ahead of real estate andconsumer discretionary. The fund is underweight in the consumer staples,healthcare, energy and industry sectors.

Italy remainsthe fund’s largest weighting at 22.3%, followed by France at 15.0% and Germanyat 14.0%. Italy is the most overweight country and Germany the second mostunderweight after France.

Digital StarsEurope Smaller Companies Acc ended December up +5.1%, vs. +2.4% for the MSCIEurope Small Cap NR. The fund has closed the year up +21.2%, outperforming itsindex by +4.9%.

In December,overexposure to the finance and materials sectors, as well as underweighting ofthe real estate sector, enabled the fund to end the year with a strongoutperformance. Good stock selection also contributed to this year-end rally.The year 2025 was marked by the theme of sovereignty, particularly in terms ofdefence (Exail Technologies, HENSOLDT), and by the revaluation of undervaluedassets, which was particularly strong in the banking sector (BPER Banca, BAWAG,Unicaja Banco). The rally in metals (Fresnillo, Pan African Resources) at theend of the year made it one of the sectors that contributed most to the fund'sperformance.

The portfolioreviews carried out in December were diversified, mainly increasing positionsin materials and finance stocks. Among the outflows were mainly stocks from theindustry, consumer discretionary and energy sectors.

The portfoliois mainly overweight finance, materials and IT, and underweight real estate,healthcare and industry.

The UnitedKingdom (the most underweight country) remains the largest country weight at20.0%, ahead of Germany at 10.5%, and Switzerland at 9.8%.

Digital StarsUS Equities Acc USD ended December at +0.5%, vs. 0% for both the MSCI USA NRand the MSCI USA Small Cap NR. Since the beginning of the year, the fund is up+12.2%, meaning -5.6% behind its index.

The fundbenefited from its overweight position in the financial sector in December, aswell as from good stock selection, particularly in the IT sector, which hasbenefited from massive investment in AI throughout the year. Although the fundwas underweight in the sector, it benefited from the excellent performance of afew stocks (Western Digital, Lam Research, KLA). Furthermore, over the year,overexposure to small and mid-cap stocks, as well as to financial sectorstocks, had a negative impact on the fund, which ended up between the MSCI USAand the MSCI USA Small Cap.

Therebalancing carried out in December was quite diversified, with the inclusionof stocks from the finance, healthcare and consumer discretionary sectors. Onthe outgoing side, we mainly find industry stocks.

The fund is still significantly overweight infinance, as well as is industry and healthcare. The most underweight sectorsremain the media, consumer discretionary and consumer staples.