The manager letter - Novembre 2025

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Equity markets:

Equity indices rose modestly in Europe in November and remained stable in the United States (MSCI Europe NR +0.9%, MSCI USA NR +0.0%).

These slight monthly variations are merely misleading in a volatile and unclear environment (with many US statistics unavailable due to the government shutdown), just as the Fed's last monetary policy meeting of the year approaches. It has been a long time since we have seen such uncertainty surrounding monetary policy, and the Fed bears much of the responsibility for this. It should be remembered that last spring, Mr Powell highlighted the risk of inflation to justify maintaining the status quo on monetary policy, a status quo that was swept aside three months later with the two rate cuts announced in September and October, respectively. The continuation of this accommodative cycle, which was fully anticipated in October, was called into question during the first half of November, with the probability of a rate cut by the Fed at its December 10th meeting falling to just 30%. By the end of the month, this probability had converged back towards 100%... exactly as in October. If this scenario were to be confirmed, investors' attention could soon turn to the ECB, which could surprise by reinitiating a cycle of rate cuts in order to counter the risk of excessive appreciation of the euro against the US dollar.

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Convertible markets:

November delivered a mixed picture. The end of the U.S. government shutdown in mid-Novemberaverted an immediate market shock, but the prolonged lack of macroeconomic data maintained significant uncertainty around the true state of the economy and the trajectory of U.S. growth. Strong earnings from companies heavily investing in AI did little to dispel rising concerns over stretched sector valuations and the time required for Big Tech’s substantial data-center spending to translate into tangible returns. These uncertainties triggered profit-taking, particularly across the names most exposed to the AI theme. At the sector level, consumer-linked distributors, automotive companies, and luxury goods performed relatively well.

Gold reached new all-time highs, gaining around +1.3% in November. Crypto-assets came under heavy pressure : Bitcoin dropped sharply at the end of November, erasing the gains accumulated since Donald Trump’s inauguration in January 2025.

In November 2025, the global convertible bond market posted a significant decline of -1.7%, its weakest monthly performance since December 2024. This downturn was primarily driven by increase drisk aversion across the crypto and AI segments, weighing on issuers such as MicroStrategy, Nebiusand Alibaba. Regionally, the sharpest drawdowns came from Asia (-4.4%) and Europe (-3.2%), while Japan and the United States limited losses to -0.7% each.

Primary market activity remained particularly strong in November, with USD 15.8bn of new issuance despite equity market volatility, driven almost exclusively by the U.S. market, which accounted for 90%of monthly supply. Year-to-date issuance now stands at USD 154bn, already surpassing the full-year record set in 2021.

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Digital Stars funds:

Digital Stars Europe Acc posted a +0.0% return in November, vs. +0.9% for the MSCI Europe NR. Since the start of the year, the fund has outperformed its index by +2.8%.

The ongoing sector rotation continued to materialise in the market, with defensive segments such as healthcare (Pharming Group), consumer staples (Barry Callebaut) and utilities (Solaria Energia) outperforming. These three sectors are currently underweight in the fund. Metals stocks (Pan African Resources, Fresnillo) partially offset the fund's still cyclical positioning, supported by the strong performance of financials (NatWest, Société Générale, Unicaja, Mediolanum). The portfolio reviews carried out in November were diversified, mainly increased our positions in the materials, energy, finance and consumer discretionary sectors. Among the exits were mainly companies from the healthcare sector. Digital Stars Europe is significantly overweight finance, as well as materials and industry, and underweight healthcare and consumer staples. The UK remains the fund's top country weight with 20.8%, ahead of Italy at 13.3% (largest country overweight) and Germany at 13.0%. At 9.3%, France is the largest country underweight.

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Digital Stars Continental Europe Acc ended November at -1.2%, vs. +0.9% for the MSCI Europe ex UK NR. Since the start of the year, the fund has outperformed its index by +5.6%.

The ongoing sector rotation is still visible in the market, with the outperformance of defensive segments such as healthcare (Pharming Group), consumer staples (Barry Callebaut) and utilities (Solaria Energia), currently underweight in the fund. A few stocks have partially offset the fund's still cyclical positioning, particularly in industrials (Hochtief, Bilfinger), financials (UNIQA, Unicaja, Société Générale) and consumer discretionary (Safilo). The portfolio reviews carried out in November were diversified, mainly increasing positions in the consumer discretionary and technology sectors. Among the exits were mainly stocks from the healthcare and industry sectors. Digital Stars Continental Europe is overweight in finance, as well as in real estate. The fund is underweight in healthcare and consumer staples. Germany represents the fund’s largest country weight at 15.9%, ahead of Switzerland at 13.1%, Italy at 12.8% (the most overweight country) and France at 10.9% (the most underweight country).

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Digital Stars Eurozone Acc posted a +0.4% return in November, vs. +0.3% for the MSCI EMU NR. Since the start of the year, the fund has outperformed its index by +3.2%.

In November, small and mid caps in the eurozone outperformed the MSCI EMU NR by +0.2%, which was favourable for the fund. It also benefited from its well-positioned sector allocation, with an overweight in the financial sector and an underweight in technology and industry. The portfolio reviews carried out in November were diversified, mainly increasing the positions in the IT, industry and utilities sectors. Among the exits were mainly finance and real estate stocks. The consumer discretionary sector remains the fund's main overweight, right ahead of real estate and finance. The fund is underweight in the consumer staples, healthcare, energy and industry sectors. Italy remains the fund’s largest weighting at 23.8%, followed by France at 15.7% and Germany at 12.8%. 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 November down -2.6%, vs. 0% for the MSCI Europe Small Cap NR. Year-to-date, the fund has outperformed its index by +1.7%.

In November, the overweight in the industrial sector had a negative impact on performance, particularly in the defence and construction sectors, especially at the end of the month following the announcement of the US peace plan. The portfolio reviews carried out in November were diversified, mainly increasing positions in energy, materials and consumer discretionary stocks. Among the outflows were mainly stocks from the industry sector (construction and defence). The portfolio is mainly overweight finance, IT, energy and consumer discretionary, and underweight real estate and healthcare. The United Kingdom (the most underweight country) remains the largest country weight at 19.8%, ahead of Germany at 12.0%, and Switzerland at 10.6%.

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Digital Stars US Equities Acc USD ended November at +1.1%, vs. 0% for the MSCI USA NR and +1.7% for the MSCI USA Small Cap NR. Since the beginning of the year, the fund is -5.6% behind its index.

November was a favourable month for smaller market capitalisations. The fund's all-cap profile enabled it to outperform its benchmark index. In addition, the fund's sector positioning also proved beneficial, thanks to the overweight in healthcare and finance. Finally, a number of technology stocks contributed significantly to this outperformance, including Western Digital, Akamai Technologies, Analog Devices and Qualys. The rebalancing carried out in November was quite polarised, with the inclusion of stocks from the finance subsectors. On the outgoing side, we mainly find consumer discretionary 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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