The investment letter - December 2025

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Equity market:

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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.

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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).

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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.

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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:

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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.

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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.

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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 Stars funds:

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Digital Stars Europe 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 2025 was dominated by the theme of sovereignty, particularly in terms of defence (Rheinmetall, Kongsberg), and by that of asset revaluation of undervalued assets, which was particularly strong in the banking sector (BPER, Banca Mediolanum). The rally in metals (Fresnillo, Pan African Resources) continued into December, to the point where the sector ultimately contributed most to the fund's outperformance in 2025. The underweighting of the defensive healthcare and consumer staples sectors also contributed positively in relative terms. Conversely, IT and travel/leisure weighed on the fund, particularly at the end of the year. The portfolio reviews carried out in December have mainly increased our positions in the materials sector, and reduced those in finance. Digital Stars Europe is significantly overweight finance, as well as materials, and remains underweight healthcare and consumer staples. The UK remains 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% and remains the largest country underweight.

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

The year 2025 was dominated by the theme of sovereignty, particularly with regard to defence (Rheinmetall, Kongsberg), and by the revaluation of undervalued assets, which was particularly strong in the banking sector (BPER, Société Générale, BPM). The materials sector continued to stand out in December, particularly in chemicals (Alzchem). The underweighting of the defensive healthcare and consumer staples sectors also contributed positively in relative terms. Conversely, technology and real estate weighed on the fund, particularly at the end of the year. The portfolio reviews carried out in December have mainly increased positions in the materials (metals) and utilities sectors, and decreased the industry sector. Digital Stars Continental Europe is mainly overweight in finance. The fund is underweight in consumer staples and healthcare. Germany remains 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.

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Digital Stars Eurozone 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 has outperformed its index by +3.7%.

In December, the fund benefited from its favourable positioning, both sectorally and geographically. In particular, it benefited from its overweight position in renewable energies (Solaria Energia y Medio Ambiante), banks and IT (hardware). This month marks the end of a year of strong outperformance, driven by themes related to sovereignty (defence, electricity generation, etc.) and to the revaluation of undervalued assets such as the financial sector as a whole. The portfolio reviews carried out in December were diversified, mainly increasing the positions in the finance and healthcare sectors. Among the exits were mainly consumer discretionary stocks. The finance sector becomes the fund's main overweight, right ahead of real estate and consumer discretionary. The fund is underweight in the consumer staples, healthcare, energy and industry sectors. Italy remains the fund’s largest weighting at 22.3%, followed by France at 15.0% and Germany at 14.0%. Italy is the most overweight country and Germany the second most underweight after France.

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Digital Stars Europe Smaller Companies Acc ended December up +5.1%, vs. +2.4% for the MSCI Europe Small Cap NR. The fund has closed the year up +21.2%, outperforming its index by +4.9%.

In December, overexposure to the finance and materials sectors, as well as underweighting of the real estate sector, enabled the fund to end the year with a strong outperformance. Good stock selection also contributed to this year-end rally. The year 2025 was marked by the theme of sovereignty, particularly in terms of defence (Exail Technologies, HENSOLDT), and by the revaluation of undervalued assets, which was particularly strong in the banking sector (BPER Banca, BAWAG, Unicaja Banco). The rally in metals (Fresnillo, Pan African Resources) at the end of the year made it one of the sectors that contributed most to the fund's performance. The portfolio reviews carried out in December were diversified, mainly increasing positions in materials and finance stocks. Among the outflows were mainly stocks from the industry, consumer discretionary and energy sectors. The portfolio is mainly overweight finance, materials and IT, and underweight real estate, healthcare and industry. The United Kingdom (the most underweight country) remains the largest country weight at 20.0%, ahead of Germany at 10.5%, and Switzerland at 9.8%.

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Digital Stars US Equities Acc USD ended December at +0.5%, vs. 0% for both the MSCI USA NR and 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 fund benefited from its overweight position in the financial sector in December, as well as from good stock selection, particularly in the IT sector, which has benefited from massive investment in AI throughout the year. Although the fund was underweight in the sector, it benefited from the excellent performance of a few stocks (Western Digital, Lam Research, KLA). Furthermore, over the year, overexposure to small and mid-cap stocks, as well as to financial sector stocks, had a negative impact on the fund, which ended up between the MSCI USA and the MSCI USA Small Cap. The rebalancing carried out in December was quite diversified, with the inclusion of stocks from the finance, healthcare and consumer discretionary sectors. On the outgoing side, we mainly find industry stocks. The fund is still significantly overweight in finance, as well as is industry and healthcare. The most underweight sectors remain the media, consumer discretionary and consumer staples.

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