IMP Global Megatrend Umbrella Fund Commentary

Global financial markets experienced a resurgence of volatility in November as concerns over the pace of Federal Reserve easing, elevated equity valuations, and disruptions stemming from the U.S. government shutdown weighed on sentiment. The Nasdaq fell nearly 8% from its monthly high before stabilizing, ultimately ending the month down 1.45%. Intermittent geopolitical tensions, including trade frictions, regional fragility, supply-side disruptions, and questions about the sustainability of current valuations, continued to dominate headlines. Against this unsettled environment, investors increasingly looked through short-term dislocations as markets regained relative composure, focusing instead on structural themes such as artificial intelligence, resilient U.S. consumption, and supportive monetary policy. Within this context, the IMP Global Megatrend Umbrella Fund returned -3.96% in November, bringing the year-to-date performance to 10.76% net of fees.

This month’s market dynamics were driven heavily by swings in technology and AI-linked equities, yet underlying fundamentals remained robust. Third-quarter results from large-cap technology companies highlighted accelerating capital expenditure and rapid AI monetization. NVIDIA delivered a historic quarter, reporting 62% year-on-year revenue growth and significantly exceeding consensus expectations. Alphabet’s upgraded AI model contributed to a late-month improvement in sentiment, reinforcing the view that the AI investment cycle remains in its early stages. BlackRock’s research highlights that while valuations for large-cap AI leaders are elevated relative to recent history, they remain well below the extremes of the late-1990s technology bubble, with today’s hyperscalers trading near 30× earnings versus roughly 80× for the “Four Horsemen” of 2000 (Microsoft, Intel, Cisco, and Dell). Even as technology stocks paused since major U.S. indices reached record highs at the end of October, they still account for the bulk of returns this year. We view the current market environment as constructive, as prevailing skepticism helps keep excess froth in check, discouraging indiscriminate inflows into the technology sector and supporting more selective, structurally driven positioning.

Beyond technology, valuation considerations remained central across broader equity markets. Global equities now trade near 19× forward earnings, approximately 25% above the two-decade average, while the S&P 500 trades near 22× forward P/E, close to the upper end of its historical range. However, valuations have historically been poor predictors of 12-month returns, with earnings strength, macro stability, and monetary policy shifts exerting far greater influence. Importantly, the sector composition of global indices has changed materially: higher-multiple industries such as information technology and communication services now represent close to 27% of the MSCI All Country World Index, compared with 11% twenty years ago. Adjusted for this structural shift, valuations appear more reasonable. Moreover, today’s AI-driven capex cycle, with hyperscalers expected to spend USD 380 billion in 2025 and USD 1.7 trillion by 2030, is both younger and more sustainable than the capex excesses seen before the dot-com crash. These dynamics support the view that elevated valuations remain justified by stronger fundamentals and long-term innovation trends.

Monetary policy developments added another layer to the market narrative. The Fed remained central in November, as the U.S. government shutdown delayed key economic data, complicating its assessment of underlying conditions. Once reporting resumed, softer data and a rise in unemployment to 4.4% fueled expectations of a December rate cut, with markets currently pricing a 67% probability that is likely to rise as labor demand cools. The PCE index also showed no signs of renewed price acceleration. Collectively, these signals have reinforced investor conviction that the Fed is on track to lower rates, with heightened attention on the press conference and updated projections for guidance on the 2026 policy path.

These shifting rate expectations were also reflected in currency markets. Alongside changing monetary expectations, the U.S. dollar continued to weaken, trending toward its worst annual performance since 2017. The consensus view holds that the USD remains structurally unattractive, as the U.S. interest-rate premium erodes, central banks diversify reserves, and persistent fiscal deficits weigh on long-term confidence. In contrast, the strong Swiss franc remains a conundrum for the SNB, with deflation risks still looming and policy options to counter a bullish currency bias into 2026 are increasingly constrained. Adding to upward pressure, successful negotiations with the United States to reduce tariffs on Swiss goods from 39% to 15% further bolster the franc’s appeal. Consequently, direct SNB intervention appears unlikely for now, as a return to negative interest rates risks reviving accusations of currency manipulation.

Throughout November, we combined selective profit-taking, accumulation at attractive valuation levels, and prudent exposure trimming where market signals indicated heightened uncertainty. Markets exhibited pockets of vulnerability, and cross-asset signals highlighted areas of stress, prompting both strategic de-risking and targeted re-engagement across our highest-conviction themes where market dislocations created tactical opportunities. Our focus remained on aligning capital with high-conviction secular themes such as Mobility and Transportation, Shifts in Economic Power, and Smart Infrastructure/Smart City while preserving flexibility to navigate volatility.

In Smart Infrastructure/City, we expanded our position in NuScale Power Corporation following a broader market correction that created an appealing entry point. With commercialization milestones advancing and growing industry support, including rising interest from major technology companies, particularly hyperscalers, seeking to secure future grid capacity. NuScale is uniquely positioned to benefit from structurally rising electricity demand. Further catalysts are expected as U.S. policy developments continue to support new reactor deployment initiatives.

Under the Shifts in Economic Power megatrend, we added to Coinbase Global, Inc. after pronounced weakness in the cryptocurrency complex created a tactical accumulation opportunity. Bitcoin’s sharp pullback weighed on crypto-related equities; however, the decline appears structural rather than fundamental, with early signs of ecosystem recovery. Strengthening retail participation, improving transactional volumes, and increasing regulatory momentum, particularly the advancing U.S. market structure legislation, support a favorable medium-term outlook for the sector and, by extension, for Coinbase as a key proxy.

In Mobility and Transportation sector, we initiated a position in BYD Company Ltd., taking advantage of an attractive entry into a global leader in vertically integrated automotive manufacturing. BYD’s control over critical components, including batteries and automotive semiconductors, enhances production efficiency and reinforces cost competitiveness. The company’s upcoming technology platform is expected to materially strengthen its product offering, potentially extending fast-charging innovations to more affordable models. Overseas markets remain a core driver of medium-term growth, while BYD’s shift toward premium positioning and advancements in adjacent technologies, such as household humanoids (consumer robotics), provide compelling long-term secular growth potential, reinforcing the investment case.

We also allocated to the WisdomTree S&P 500 VIX Short-Term Futures Leveraged ETP to serve as a tactical hedge. The position offered protection against potential volatility spikes during a period of heightened market caution. As sentiment improved, the allocation was fully divested, though we remain prepared to re-engage should volatility pressures re-emerge.

On the divestment side, partial sales in NVIDIA Corp. and Amazon.com Inc. allowed us to crystallize gains while managing concentration risk. NVIDIA’s reduction captured strong year-to-date performance and a recent rally, whereas Amazon’s trim followed a post-earnings surge to new highs, offering a timely opportunity to realize profits while retaining flexibility to re-enter as market sentiment recovers.

We fully exited Meituan after prolonged underperformance driven by intensifying competition, rising customer-retention costs, and subdued consumer sentiment in mainland China. Persistent margin pressure and continued EBITDA risk justified redeployment into higher-conviction opportunities. Similarly, the holding in Dr. Ing. h.c. F. Porsche AG was fully divested amid ongoing challenges in its EV strategy, a sharp decline in China sales, tariff headwinds, and slower-than-expected adoption of battery-electric vehicles. With limited near-term catalysts and profitability targets likely delayed, capital was reallocated until clearer signs of a sustainable turnaround emerge.

November highlighted the resilience of the U.S. economy, strong innovation driven earnings, and the constructive path of monetary policy heading into year-end. The tech heavy Nasdaq remains near its all-time high, supported by robust AI fundamentals, accelerating token usage, and stable mega cap margins. While valuation anxiety and episodic volatility may persist, fundamentals are anchored by steady disinflation, solid corporate profitability, and accelerating structural investment in AI, electrification, and next generation infrastructure. We maintain a pragmatic but disciplined stance, expecting the Federal Reserve to continue easing into early 2026, and see selective equity positioning particularly across our identified secular themes as strategically compelling. Long term success requires patience, strategic portfolio rotation, and disciplined risk management. The transformative trends shaping this cycle continue to create significant opportunities, underscoring the importance of staying invested, diversified, and forward looking.

Thank you for your continued trust and support.

Stefan Wiederkehr & Karin Wiederkehr

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IMP Global Megatrend Umbrella Fund Commentary - 30 November 2025