Outlook Second Quarter 2025

Marketing communications for professional investors in Italy.

Before making any investment decision, please read the Prospectus and related KIDs.

• Q1 2025 Performance of the Destination Value Total Return Fund: +6.4% (USD), +2.4% (EUR), and +4.4% (EUR Hedged)
• 2024 Performance of the Destination Dynamic Income TR Fund: +1.4%; Destination Rendimento: +1.4% (both in EUR)
• Destination Capital TR Fund: +6.4% in USD, +4.3% EURH in the first quarter
• U.S. trade policy and its constraints
• Economic implications: opportunities for China and Europe
• End of the secular bull market in U.S. equities and the dollar
• Plenisfer Investments: approaching the 5-year anniversary

1. Positive Q1 performance across all our funds, despite volatility

The Destination Value Total Return Fund delivered a +6.4% return in 2025 (Class I USD), +2.4% for the EUR share class, and +4.4% for the EUR hedged class. The difference between share classes reflects the USD/EUR exchange rate movement from the end of 2024 to March 31, 2025.

Positive contributors during the quarter included Chinese equities, benefiting both the Special Situations strategy (Alibaba) and the Compounders (Tencent and AIA), as well as European stocks—especially Greek banks (macro strategy) and Webuild in special situations.

In credit, the Income strategy particularly benefited from exposure to financials (AT1 and Tier 2), while the stressed and distressed strategy added 80 bps.

The gold position (now classified under Macro rather than Alternatives) also made a strong contribution of 100 bps during the quarter.

Our fixed-income total return funds posted positive performances: +1.5% for both Destination Dynamic Income TR and Destinazione Rendimento, with positive contributions from both currency and interest rate positions more than offsetting the negative impact of credit spread widening.

Lastly, on January 15, the Destination Capital equity total return fund celebrated its first anniversary, allowing us to now report performance since launch: +17.6% for the EURH class and +16.4% for the USD class. In Q1, performance was +6.4% (USD) and +4.3% (EURH), compared to a negative return in global equity markets (MSCI ACWI -1.7%).

That summarizes performance as of the end of March. Then came the shock of the tariff announcement, which threw financial markets into panic.

2. U.S. Tariff Policy: Rising Recession Risks

When we wrote in our annual letter that global issues would return to the forefront of market attention—after a 2024 dominated by so-called American exceptionalism (big U.S. tech, stock markets, and the dollar)—we did not imagine that the “Trump cyclone” would have such a disruptive impact.

Apparently, Donald Trump’s intentions are nothing less than a radical overhaul of the international geopolitical and economic order. Will he succeed? How will the rest of the world respond? These are questions for which, we think, there won’t be clear answers for quite some time.

First of all, it's unclear whether Trump is guided by a stable and coherent economic policy plan. His advisor Peter Navarro and Treasury Secretary Scott Bessent hold opposing views on tariffs. Even assuming the U.S. government truly aims to take America back to the McKinley era of the late 19th century—when the government financed all of its expenses through tariffs—it is proceeding through trial and error. Naturally, this generates high levels of uncertainty for economic agents, households, and businesses.

Moreover, Trump’s policies are inherently contradictory. His main goal is significant tax cuts, and his plan is to fund them through tariffs. But raising tariffs is effectively a massive, immediate tax hike—primarily paid by U.S. consumers and domestic companies in the form of lower profits. Meanwhile, tax cuts (or even the failure to renew existing ones) would only have delayed effects.

There are also two major constraints on Trump's economic policy. First, his administration operates in a multipolar world. During Trump’s first term, trade tensions were largely limited to China; since then, global trade has expanded by 20% from 2016 to 2024. Today, however, the trade war also targets traditional allies such as Europe and Japan.

Even for the U.S., it is difficult to act unilaterally and forcefully against the rest of the world. Other countries will make procurement decisions that disadvantage American interests—whether it’s choosing suppliers for defense equipment or deciding between an American or Chinese AI infrastructure, to make just two examples.

President Trump’s plan to make the world pay for U.S. tax cuts is unlikely to work. That’s why we believe it will eventually be scaled back.

3. The Reaction of the Bond Market

The second problem for Trump is the reaction of the bond market, which will not allow him to cut taxes to the extent he envisages. This is because the bond market understands that tariffs are not a sustainable source of revenue. Tariff income will decline over time as global trade patterns shift and other countries adapt. Meanwhile, the effects of tax cuts on the U.S. budget deficit—which already stands at 7%—are likely to be long-lasting.

Currently, 10-year U.S. Treasury yields have stabilized around 4%, whereas two years ago—following fears of recession sparked by the collapse of Silicon Valley Bank—they had dropped below 3.5%. Why? Due to concerns about the fiscal outlook. At the same time, the U.S. dollar has continued to weaken.

If concerns about fiscal sustainability continue to outweigh the yield-depressing effects of an economic slowdown, this would create a complex situation for both the U.S. Treasury and the Fed. And as the president's approval rating starts to fall and unemployment starts to rise, Trump will likely be forced to backtrack on some of his extreme trade moves.

The key question is timing. If this reversal begins within the coming weeks, a recession might still be avoided. Otherwise, it will be difficult to do so.

4. Toward a New Capital Flow Regime, unfavorable to the Dollar and U.S. Assets

Even more significant are the medium- to long-term consequences for the international capital flow regime, which is likely to be radically reconfigured.

In recent weeks, much has been said about a hypothetical “Mar-a-Lago accord” on the international currency system, based on the idea that the dollar’s reserve currency status is a burden for the U.S., as it leads to structural appreciation and undermines the country's competitiveness. The suggestion is that the U.S. should abandon this status, particularly through tariff policies and a “managed” depreciation of the dollar.

But there will be no need for a grand currency agreement. International bond markets will become increasingly reluctant to buy U.S. Treasuries due to rising concerns about the fiscal deficit, while other countries—especially Europe and China—are gearing up to strengthen their growth strategies. We are therefore heading toward a major macroeconomic shift, driven by fiscal policy, in which U.S. growth expectations decline while growth expectations in the rest of the world rise.

That’s why we believe the dollar’s decline is set to continue. We expect the trade-weighted dollar to fall by 20–30% over the next three years. The dollar had simply become too expensive. It was propped up by a massive increase in U.S. fiscal spending over the last five to eight years. Trump has effectively burst the bubble of American exceptionalism. We are now entering a secular trend of capital outflows from the U.S. and inflows toward other regions, especially Europe and emerging markets.

The key point is that currency trends will be driven less by interest rate differentials—as was the case in the past—and more by the underlying structural strength of economies, characterized by:

• Low inflation
• Interest rates under control
• Stable and predictable economic policies

All of this leads us to maintain a structural underweight in the dollar and a structural overweight in gold in our portfolios. In fact, in this context of capital flowing out of dollar-denominated assets, we also anticipate an increase in investment demand for gold, which until now had been largely supported by emerging market demand—but very little by Western investors (e.g., ETFs). In this scenario, gold prices could likely rise well above current levels.

5. Europe’s Fiscal Shift

It will be important to observe how China, Europe, and other countries respond to Trump’s moves. They might opt for retaliatory measures (as China has already announced), or they could decide to implement stimulus policies aimed at boosting domestic demand.

If the latter occurs, it would signal a structural shift in the growth models of these countries—especially China and Germany, both of which have traditionally followed “mercantilist” economic strategies, focused on export-driven growth and restricted domestic consumption. This would also create significant investment opportunities, as we’ll explore.

We believe that the relative outperformance of European and Chinese equity markets versus U.S. equities could continue and become one of the key investment themes of the next five years. And this trend will likely persist regardless of the severity of the trade war, because the real driver of the capital rotation away from the U.S. is fiscal policy, not trade policy.

From 2010 onwards, the outperformance of the U.S. equity market was initially about corporate exceptionalism—profit growth and the business models of Big Tech. But from 2017, and especially after the pandemic, the story became one of fiscal expansion. The U.S. has spent 400% more than Europe in recent years. Going forward, the bond market will no longer allow this degree of U.S. fiscal expansion.

At the same time, Europe’s fiscal stance is shifting in the opposite direction, with major investments in infrastructure and defense, led—surprisingly—by Germany. This marks a historic macroeconomic turning point. One might say Trump has catalyzed this transformation, but we believe it had become inevitable.

But this isn’t the only reason to be optimistic about European equities. There are several others.

First: U.S. stock valuations remain significantly higher than European ones—even after the first-quarter rebound. However, EPS (earnings per share) growth in Europe and the U.S. has been identical over the past five years. Investors often assume valuations reflect Europe’s weaker economy, but in reality, they mostly reflect the excessive U.S. fiscal spending in recent years.

Second: Europe has moved past the energy crisis. Over the next two years, a wave of LNG (liquefied natural gas) supply will flood the continent with cheap energy.

Third: Geopolitical pressure is forcing European policymakers to finally focus on completing the single market. Europe has many well-run companies, but their profit margins are constrained because they operate across so many fragmented jurisdictions. For example, a Chinese telecom company might have 400 million users, a U.S. one 120 million, while European ones often operate with only 10 million. Completing the single market and encouraging M&A activity is essential.

Finally, the defense issue. Both Putin and Trump have forced Europe to consider radical reforms, including on defense. The risk that the U.S. will abandon Europe is likely overestimated, as is the idea that Russia has the capability to launch an offensive against Europe. As a result, we find ourselves in a situation where perceived risks are overstated while the potential impact of ongoing reforms is underestimated.

6. Opportunities in China

China also has a historic opportunity to assert its ambitions as a global economic power, especially in light of the U.S. shift toward isolationism and prioritizing domestic interests.

The country’s main economic challenge remains the structural weakness of domestic consumption, stemming from the bursting of the real estate bubble. China now faces a context of secular stagnation, with low growth and low inflation, where interest rates are very low—similar to the U.S. in the post-2010 era. That period of cheap money in the U.S. led to a wave of innovation, both in energy (shale oil) and technology.

China might now pursue a similar innovation-driven path, particularly in the tech sector. Signals from senior officials in the Chinese Politburo suggest this direction, especially with the “rehabilitation” of top executives in major Chinese tech companies. Having already gained competitiveness in a number of high-value-added sectors—from electric vehicles to semiconductors to advanced manufacturing and industrial components—China is well-positioned to maintain a strong trade surplus with Southeast Asia, the Middle East, and Latin America.

Furthermore, if the U.S. adopts a confrontational stance on global trade, it will inevitably open the door to Chinese AI products and European capital goods and defense technologies in global markets. Alibaba could emerge as a leading AI cloud infrastructure provider in the Global South. European firms may dominate automation and commercial aviation. BYD could lead the global electric vehicle revolution.

7. Conclusion

For now, the combination of slowing global growth expectations and a drop in energy prices has led to a decline in equity markets, widening spreads on corporate bonds, and only a modest decline in long-term U.S. bond yields.

Let’s not forget that between the second half of 2025 and the first half of 2026, the U.S. Treasury will need to refinance a mountain of maturing debt, and the same goes for a large volume of corporate bonds. For both, lower yields will be essential in this phase.

At the moment, we are keeping our exposure to risk assets at a minimum, have increased hedging, and maintain a maximum underweight on the dollar and a relatively long duration compared to historical averages. However, we are ready to seize market opportunities as they arise—in the best-case scenario, in the coming weeks, or in the coming months, if recent volatility persists.

***

As we approach the fifth anniversary of our flagship multi-strategy fund, Destination Value TR, on May 4, 2025, we would like to express our sincere gratitude to all the investors who have placed their trust in us over the years.

To them, we reaffirm our commitment: we will continue to work with the utmost dedication to identify the most compelling global investment opportunities, while striving to protect their assets as effectively as possible from macroeconomic, geopolitical, and market risks.

Disclaimer

Marketing communication for professional investors in Italy.

Please refer to the Prospectus and KID before making any final investment decisions.

Destination Value Total Return ("DVTR") -Investment Objective and Policy: The objective of this Fund is to achieve a higher risk-adjusted total return over the market cycle. To achieve the Fund's objectives, it is essential to realize long-term capital appreciation and underlying income through a long-term orientation on valuation and market cycles. Benchmark: SOFR Index. The Fund is actively managed and uses the Benchmark to calculate the performance-related fee. The Fund does not use the Benchmark for investment purposes.

Destination Dynamic Income Total Return ("DDITR") - Investment Objective and Policy: The Fund aims to achieve attractive risk-adjusted total return through capital appreciation and income generation over the medium term. The Portfolio is actively managed and does not make investments in relation to any benchmark; this means that individual positions are actively selected based on specific research and evaluations. Although it is actively managed and does not use a benchmark for portfolio allocation, the Portfolio refers to the €STR Index for performance fee calculation purposes.

Destination Capital Total Return ("DCTR") - Investment Objective and Policy: The Portfolio aims to achieve an attractive total return in terms of risk through long-term capital appreciation with some income generation, focusing on long-term valuation and market cycles. The Fund is actively managed and does not make investments in relation to any benchmark; this means that individual positions are actively selected based on specific research and evaluations. Although it is actively managed and does not use a benchmark for portfolio allocation, the Portfolio refers to the MSCI ACWI Total Return USD Index for performance fee calculation purposes.

There is no guarantee that an investment objective will be met or that there will be a return on capital. The sub-fund does not benefit from any guarantees to protect capital.

Synthetic Risk Indicator DVTR and DDITR (classes R EUR Acc): 3 (medium-low risk) 

Synthetic Risk Indicator DCTR (Class I USD Acc): 4 (medium risk) 

The Risk Indicator may vary by Fund and share class, please refer to the relevant Prospectus and PRIIP KID for more details. For SRI classification of other share classes available in your country, please get in touch with your financial advisor.

Main risks of the Funds: interest rate risk, credit risk, emerging market risk (including China). There is no predetermined limit to exposure to emerging markets. Therefore, emerging market risk could be high at times, frontier market risk, foreign exchange risk, volatility risk, liquidity risk, derivatives risk, short exposure risk, distressed debt securities risk, securitized debt risk, contingent capital securities risk ("CoCos"), Equity risk, Commodity risk, Securities under Rule 144A / Regulation S. Capital loss risks: this fund is not a guaranteed product. You may not receive part or all of the initial amount invested. Considering the investment strategies that characterize the Funds, the expected level of leverage may vary up to 350%, excluding the total net value of the portfolio. The use of leverage can increase the risk of potential losses. This is not an exhaustive list of risks. Other risks may occur. Before making any investment decision, please read the Prospectus and the Key Information Document (KID), especially the risks and costs section, available at the following web pages:

- https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-value-total-return-iyh-eur-or-lu2087694647-acc-LU2087694647 https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-value-total-return-iyh-eur-or-lu2087694647-acc-LU2087694647

- https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-dynamic-income-total-return-ix-or-lu2597958938-distr-LU2597958938

Reference currencies of the sub-funds: USD (Destination Value Total Return and Destination Capital Total Return) and EUR (Destination Dynamic Income Total Return). When the Fund/Action reference currency is different from yours, returns and costs may increase or decrease due to currency and exchange rate fluctuations.

(DVTR) Costs: Class R, Share: X EUR Accumulation (ISIN: LU2185978587, registered in Austria, Germany, Italy, Luxembourg and Portugal). One-time costs on entry or exit: Entry costs: 5% of the amount you pay when you subscribe to this investment. This is the maximum you will be charged. Exit costs: 0% we do not charge an exit fee for this product. Underwriting costs are calculated based on NAV. Ongoing costs recorded each year: Management fees and other administrative costs: 1.46% per year (including management fee: 1.25%). This is an estimate based on last year's actual costs. Transaction costs: 0.28% per year of the value of your investment. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. Incidental charges incurred under certain conditions: Performance Fee: 0.00% The redemption fee is calculated based on the mechanism of the "High Water Mark with Performance-Related Fee Benchmark," with a Performance-Related Fee Rate of 15.00% per annum of the positive return achieved above the "SOFR Index" (the Performance-Related Fee Benchmark). The current amount will vary according to the performance of your investment.

(DDITR) Costs: Class R, Share: X EUR Accumulation (ISIN: LU2597958268, registered in Austria, Switzerland, Germany, Spain, France, Ireland, Italy, Luxembourg and Portugal). One-time costs on entry or exit: Underwriting costs: 4%, of the amount you pay when you subscribe to this investment. This is the maximum you will be charged Exit costs: 0%, we do not charge any exit fees for this product. Underwriting costs are calculated based on NAV. Ongoing costs recorded each year: Management fee and other administrative or operating costs: 1.31% (including management fee: max 1.10% per year) of investment value per year. This is an estimate based on the last year's actual costs. Transaction costs: 0.15% of the value of the investment per year. This is an estimate of the costs incurred in buying and selling the underlying investments for the product. Ancillary charges incurred under certain conditions: Performance fee: 0.00%. The performance fee is calculated according to the "High Water Mark with performance fee benchmark" mechanism with a performance fee rate of 15.00% per annum of the positive return above the €STR Index (the performance fee benchmark).

(DCTR) Costs: Class I, Share: X USD Accumulation (ISIN: LU2717270206, registered in Germany, Spain, France and Italy). One-time costs on entry or exit: Underwriting costs: 0%, we do not charge any underwriting fees for this product. This is the maximum you will be charged Exit costs: 0%, we do not charge any exit fees for this product. Underwriting costs are calculated based on NAV. Ongoing costs recorded each year: Management fee and other administrative or operating costs: 0.90% (including management fee: max 0.75% per year) of investment value per year. This is an estimate based on the last year's actual costs. Transaction costs: 0.12% of the value of the investment per year. This is an estimate of the costs incurred in buying and selling the underlying investments for the product. Ancillary charges incurred under certain conditions: Performance fee: 0.00%. The performance fee is calculated according to the "High Water Mark with performance fee benchmark" mechanism with a performance fee rate of 15.00% per annum of the positive return above the MSCI ACWI Net Total Return USD Index (the performance fee benchmark). The actual amount will vary according to the performance of your investment.

Performance and management fees are calculated and, where applicable, accrued separately for each share class within a sub-fund on each valuation day.

Costs may increase or decrease depending on currency fluctuations and exchange rates.

This is not an exhaustive list of costs. Other costs apply and vary depending on the share class. Before making any investment decision, please read the Prospectus and the Key Information Document (KID), especially the sections on risks and costs. The documents are available at the following web pages: 

- https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-value-total-return-iyh-eur-or-lu2087694647-acc-LU2087694647

- https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-dynamic-income-total-return-ix-or-lu2597958938-distr-LU2597958938.

Recommended holding period: 5 years (DVTR), 4 years (DDITR), 5 years (DCTR)

SFDR Classification: The Funds promote, among other characteristics, environmental or social characteristics according to Article 8 of Regulation (EU) 2019/2088 on Sustainability Reporting in the Financial Services Sector ("SFDR"). The Funds are not an Article 9 according to SFDR (does not have sustainable investment as an objective). For all information on SFDR (Sustainable Finance Disclosure), please refer to Annex B of the Prospectus ("pre-contract document"). Before making an investment decision, please also consider all ESG features or objectives, approach, binding elements and methodological limitations contained in the SFDR Pre-contractual Disclosure, as well as the Summary of Product Disclosure on the website, available in English or in an official language of your country of residence, in the "Sustainability Disclosure" section of the website: https://www.generali-investments.lu/it/en/institutional/sustainability-related-disclosure.

Important Information 

This marketing communication relates to Plenisfer Investments SICAV, an investment company with variable capital (SICAV) under the Luxembourg law of December 17, 2010, qualified as an undertaking for collective investment in transferable securities (UCITS), and its Funds, " Destination Value Total Return," "Destination Dynamic Income Total Return," and "Destination Capital Total Return ("DCTR")," collectively referred to as "the Funds." This marketing communication is intended for investors in Italy, where the Funds is registered, and is not intended for retail investors or U.S. persons as defined in Regulation S of the United States Securities Act of 1933, as amended. 

This document is co-issued by Generali Asset Management S.p.A. Asset Management Company, Generali Investments Luxembourg S.A. and Plenisfer Investments SGR S.p.A. ("Plenisfer Investments"). Plenisfer Investments is authorized as a SICAV - UCITS management company in Italy, regulated by the Bank of Italy - Via Niccolò Machiavelli 4, Trieste, 34132, Italy - CM: 15404 - LEI: 984500E9CB9BBCE3E272.

The Fund Management Company is Generali Investments Luxembourg S.A., a public limited company (société anonyme) under Luxembourg law, authorized as a UCITS Management Company and Alternative Investment Fund Manager (AIFM) in Luxembourg, regulated by the Commission de Surveillance du Secteur Financier (CSSF) - CSSF Code: S00000988 LEI: 222100FSOH054LBKJL62. 

Generali Asset Management S.p.A is an Italian asset management company regulated by the Bank of Italy and appointed to act as a commercial promoter of the Funds in the EU/EEA countries where the Funds are registered for distribution (Via Niccolò Machiavelli 4, Trieste, 34132, Italy - C.M.n.15376 - LEI: 549300LKCLUOHU2BK025).

Before making any investment decision, please read the Key Information Document (KID), the Prospectus and Annex B of the Prospectus ("pre-contractual document"). The KIDs are available in one of the official languages of the EU/EEA country where the funds are registered for distribution, and the Prospectus is available in English (not French), as are the annual and semi-annual reports at www.generali-investments.lu or upon request free of charge to Generali Investments Luxembourg S.A., 4 Rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg, e-mail address: GILfundInfo@generali-invest.com. The Management Company may decide to terminate the agreements entered into for the marketing of the Funds. For a summary of your rights as an investor in connection with an individual complaint or collective action for a financial product dispute at the European level and at the level of your country of residence in the EU, please refer to the following link https://www.generali-investments.lu/lu/en/institutional/about-us-sfdr. The summary is available in English or an authorized language in your country of residence. A summary of the SFDR information (in English or an authorized language) on the product is available on the Funds page of the website in the "Sustainability Information" section

This marketing communication is not intended to provide investment, tax, accounting, professional or legal advice and does not constitute an offer to buy or sell the Funds or any other security that may be presented. Any opinions or forecasts provided are current as of the date specified, may change without notice, may not occur, and do not constitute a recommendation or offer of any investment. Past or target performance does not predict future returns. There is no guarantee that positive forecasts will be achieved in the future. The value of an investment and any income from it may rise or fall, and you may not recover the full amount originally invested. Future performance is subject to taxation, which depends on each investor's personal circumstances and may change in the future.

Please get in touch with your tax advisor to understand the impact of taxes on your returns. The existence of a registration or approval does not imply that a regulatory authority has determined that these products are suitable for investors. It is recommended that you carefully consider the terms of your investment and obtain professional, legal, financial and tax advice where necessary before making a decision to invest in a Fund. 

Generali Investments is a brand name of Generali Asset Management S.p.A Asset Management Company, Generali Insurance Asset Management S.p.A. Asset Management Company, Generali Investments Luxembourg S.A. and Generali Investments Holding S.p.A. - Sources (unless otherwise stated): Plenisfer Investments and Generali Asset Management S.p.A Asset Management Company.