Postbank

The Fund is actively managed and it invests primarily in a portfolio composed of bank deposits, money market instruments and debt securities denominated in EUR. The Fund may invest more than 35% of its assets in Greek Government Debt Securities and more than 50% of its assets in debt securities, money market instruments and bank deposits that bear Greek country risk. The investment portfolio of the Fund aims to a duration lower than three (3) years. The Fund is not allowed to invest in equity securities.

Core yields continued to grind lower through most of the quarter, as the initial shock from Germany’s increased fiscal spending in March was perceived to have limited short-term impact. Meanwhile, the ECB proceeded with rate cuts in both April and June. Toward the end of the quarter, the Iran-Israel escalation led to a spike in oil prices and raised concerns about inflation, but these fears quickly subsided. Nonetheless, core yields reversed course and moved higher after Germany announced an additional €19 billion in funding for Q3, rekindling concerns about near-term fiscal expansion. Despite elevated volatility, market sentiment remained firmly risk-on, with spreads—both peripheral and corporate—tightening further as demand for yield remained robust. The yield curve steepened through April, stabilized in May, and then briefly attempted to flatten in June before resuming its steepening trend following the Middle East developments.

The fund performed strongly during the quarter, with most gains driven by corporate credit positions. A significant steepening trade also contributed positively, though to a lesser extent than in the previous quarter. Short positions in Italian and French bond futures detracted from performance; in response, we reduced positions in Italian bond futures in favor of French ones, as we observed signs of improving macroeconomic fundamentals in Italy. We were also quite active in the primary market throughout the quarter, as issuers continued to have a significant presence