Outlook Third Quarter 2025

Marketing communication for professional investors in Italy.
Before making any investment decision, please read the Prospectus and related KIDs

Giordano Lombardo, Founder, CEO and Co-CIO Plenisfer Investments SGR
July 7, 2025

1. Second quarter and YTQ performances
2. Investing in the new world order: the 5 risk factors that the market underestimates.
3. Implications for the portfolio: global rotation and the new asset allocation map: where and how to look for yield today.
4. Artificial Intelligence, the wild card of the new world order: implications for the equity view.
5. Conclusion: navigating the markets between structural inflation and financial repression.

1. Second quarter and YTQ performances

All Sub-Funds performed positively - particularly the multi-asset and equity Sub-Funds - in both Q2 and YTQ[1]:

• Destination Value Total Return Sub-Fund [2] returned 16.7% YTQ for the USD share class, 9.3% for the EUR hedged share class, and 2.7% for the EUR share class; in Q2 2025 it returned a gain of 9.7%, 4.6%, and 0.9% for the respective share classes.
• Destination Capital Total Return Sub-Fund [3] returned 20.4% YTQ for the USD share class and a gain of 13.9% for the EUR hedged share class; in Q2 2025 returned 13.1% and 9.2%, respectively.
• Destination Dynamic Income Total Return Sub-Fund [4] returned 2.1% YTQ in EUR and a gain of 0.7% in EUR for Q2 2025.

2. Investing in the new world order

The second quarter of the year opened with the Liberation Day shock that swept the global markets, and it ended with the escalation between Iran and Israel/USA. Despite this, US stock indices returned close to their all-time highs. After an early part of the year marked by the “end of American exceptionalism”, stock and bond markets showed an incredible ability to ignore all negative news, both economic and geopolitical.

Yet the conflict between Israel and Iran is only the latest element of uncertainty. With valuations at 22.5 times the price/earnings ratio for the US stock market, the market is underestimating or ignoring five risk factors altogether:

1. Geopolitical risks of further escalation of existing (Middle East, Eastern Europe) or potential (Taiwan) military conflicts.
2. Growing social and political tensions in the United States, at a level of an intensity not seen since the Vietnam War.
3. Tariff-related economic risks, which could simultaneously lead to a slowdown in economic growth and a rise in inflation.
4. An unprecedented public and private debt load in the US.
5. The largest capital expenditure in history (for artificial intelligence), is itself a positive factor, were it not for the fact that the return on that investment is at least uncertain. 

But how can the strength of the US stock market be explained in the face of this list of risk factors? 

Are we back to the so-called “American exceptionalism”, prematurely given up for dead earlier this year? Should we go back to considering the “overweight” of US assets as the winning asset allocation choice, as it has been at least since the 2008 crisis onwards? 

To answer this question, it is important to bear in mind that American exceptionalism rests on four pillars:

1. The dollar, as the reserve and reference currency in global trade. While the dollar will continue to be the world's main reserve currency for some time, we are already seeing the first signs of the erosion of its centrality. In fact, a system characterised by growing currency multipolarity, as well as economic and political multipolarity, is emerging.
2. The structural US trade deficit, counterbalanced by the structural surpluses of China and Germany. For more than 30 years, the global economy has rested on an unbalanced but functional global trade model: the US (along with a few other Anglo-Saxon countries) has been the world's largest source of consumption demand, accumulating structural trade deficits, while other countries - notably China and Germany - have based their growth model on a mercantilist policy of exports and compression of domestic demand, accumulating surpluses. This system has supported globalisation and, to some extent, monetary stability. But it has also produced strong distortions: deindustrialisation and increased inequality in importing countries, hyper-dependence on exports in producing countries. This global equilibrium based on current account imbalances is breaking down. In a more multipolar and fragmented world where economic relations are becoming more regionalised, capital account imbalances are also shrinking. This results in a reduced need for surplus countries to hold US government bonds as part of their foreign exchange reserves.
3. The pax americana as the pivot of geopolitical balances. Trump has cast doubt on its value with his disengagement in European defence and the US retreating within its own (current and other) borders.  The new paradigm is no longer “integrated globalisation”, but “competitive regionalisation”. This dynamic, coupled with instability in the Middle East, European rearmament and less cohesion in the West, creates a context in which US foreign policy becomes much less predictable, and therefore less credible. As Niall Ferguson points out, when a power spends more on debt servicing than on defence it signals the beginning of the decline of its “imperial” dominance.
4. Expansionary fiscal policy as the engine of the economy. The US federal deficit is now close to 7% of GDP[5], in times of full employment, and makes US debt vulnerable to a rise in rates or a drop in international demand for Treasuries. On the fiscal front, however, we are now witnessing a potentially very significant change, probably unintentional, and certainly not marked by greater discipline: US tariffs are, in fact, an instrument of fiscal tightening, which is countered by potential fiscal expansion in Europe, driven, incredibly, by Germany.

In conclusion, the elements of a new world, economic, geopolitical and monetary order cannot be ignored, and the biggest telltale is the dollar. If the American stock exchange does not seem to give much weight to the growing geopolitical and macroeconomic risk factors, the behaviour of the dollar is different. It has embarked, in our opinion, on a trend of decline that is destined to continue.  In the new world order, the dollar is no longer seen as an unconditional safe haven, nor as the main trading currency. Regional trade and the purchase of raw materials no longer necessarily take place only in dollars, not least because the perceived “geopolitical” risk of the US currency has increased, especially since the freezing of Russian foreign exchange reserves in dollars following the attack on Ukraine. Moreover, gold's strength is the other side of the dollar's weakness.

3. Implications for the portfolio

In the new world order, the consequence for portfolios is a gradual but irreversible global rotation towards a broader, selective and diversified view. But is it possible to underweight the US in a portfolio? US equity now accounts for almost 70% of global capitalisation: underweighting it significantly is therefore an almost impossible choice for a traditional asset manager, however, not for those of us whose management philosophy is based on the pursuit of absolute return. This does not mean completely ignoring US stocks, which will continue to offer stock picking opportunities. But it is essential to look for yield in other areas of the world.

The European stock market has performed well since the beginning of the year: there is strong expectation for a turnaround in fiscal policy, especially after Germany's historic decision to loosen its grip on fiscal austerity. This change is not yet accomplished, but it is potentially momentous. Equity valuations in the old continent are still much lower than in the US. In this area, we have exposure both in the financial sector (equity and credit) and in a good number of small and mid-caps.

Asia is the area where we expect the highest economic growth in the coming years, supported by promising demographic and industrial trajectories. In the area, China, despite announcements and timid signals, has not yet taken a decisive initiative to support domestic consumption, which remains the weak point of the Chinese economy. The government's philosophy is more oriented towards a strong support of industrial policy in leading sectors, which should drive employment growth, than towards a direct support of consumption demand.  In recent years, China has in fact achieved global leadership in numerous strategic sectors, from technology to energy or electric mobility. It is in these sectors, but not only in them, that we have long held select positions.

Lastly, Latin America is showing the first signs of a new season of fiscal austerity and openness to private capital, with the Argentinean model likely to be emulated by the next Brazilian government coming in 2026. We have therefore started to invest in local banks characterised by high profitability and compressed valuations.

On the bond front, we also increased our corporate credit positions in Latin America, while reducing our positions in European financials and energy stocks, where spreads have compressed significantly.

We continue to believe that it is appropriate to hold a significant portion of the portfolio, up to 25%, in real assets. These include, first and foremost, gold, not only because of the dynamics that have sustained its rally in recent years - from central bank purchases to more recent financial investor purchases - but especially because of its nature as a ‘safe haven currency’ in the face of a dollar that is gradually losing centrality and inflation that will be structural in the coming years.

4. Artificial Intelligence: the wild card of the new world order

What could play in the opposite direction to the previous considerations? Artificial intelligence is a deflationary force that could significantly affect the balance of the new economic order: thanks to its ability to dramatically increase productivity - which according to the most optimistic estimates could double to 3 per cent in the US by the end of the decade [6]- and to its historically unprecedented speed of adoption. It is not yet clear who the winners and losers of this epochal race will be, and the ability of big tech to monetise the acceleration of capex investments made and planned remains unanswered. But one thing is certain: it is a key disruptive factor. Which could at least partially overturn previous arguments about the need to underweight US equities.

We therefore monitor the current and potential effects of its adoption on the industries in which we are invested, while we have built an indirect exposure by selecting AI enablers and the consequent demand for power, flanking them with targeted investments in hyperscalers with acceptable multiples and prospects. These include Meta whose monetisation plans on advertising models look particularly promising. We continue to analyse individual high-potential opportunities globally along the entire AI value chain. For example, we have also invested in the energy sector, through Uranium, whose position we have recently increased, and in smaller companies that we believe can indirectly benefit from the AI adoption race through consulting (Reply).

5. Conclusion

We remain convinced that, because of the convergence of structural phenomena destined to reshape the world economic, monetary and geopolitical order, the next five years will be very different from those we have just experienced. The scenario we will face will be one of lower growth in the West, starting with the US, and structural inflation. And with a record global public debt that has already exceeded $324 trillion in the first quarter of 2025[7], many countries may resort to forms of financial repression.

The consequence? Negative real yields for government bonds of the most indebted countries with uncertain growth trajectories. 

We continue to pursue the goal of delivering real returns, aware that in this new world order, truly active management, not tied to benchmarks, is not only relevant, but increasingly necessary.

***

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[8]: The objective of this Sub-Fund is to achieve a higher risk-adjusted total return over the market cycle. To achieve the Sub-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 Sub-Fund is actively managed and uses the Benchmark to calculate the performance-related fee. The Sub-Fund does not use the Benchmark for investment purposes.

The Sub-Fund seeks to achieve its objectives by investing globally with exposure in both Organisation for Economic Cooperation and Development (OECD) and non-Organisation for Economic Cooperation and Development (non-OECD) markets. The Sub-Fund will vary its exposure to a variety of asset classes such as, but not limited to, equity, debt, currency and, through Transferable Securities and/or other permitted investments, real assets.

Destination Dynamic Income Total Return ("DDITR") - Investment Objective and Policy[9]: The Sub-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.

The Sub-Fund seeks to achieve its objective by investing dynamically across the global fixed income asset class, in both Organisation for Economic Cooperation and Development (OECD) and non-Organisation for Economic Cooperation and Development (non-OECD) markets. The Sub-Fund will vary its exposure across the fixed income asset class with a strong focus on credit fixed income instruments plus a complement of other instruments with relevant carry elements.

Destination Capital Total Return ("DCTR") - Investment Objective and Policy[10]: 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 Sub-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.

The Sub-fund seeks to achieve its objective primarily by investing dynamically across the global equity asset class. The Sub-fund may also invest across other asset classes on an ancillary basis including, but not limited to, debt securities, currency and real asset through eligible Transferable Securities and/or other permitted investments. Issuers of the aforementioned securities may be located in any OECD or non-OECD country, including emerging and frontier markets, without any pre-determined limitation in terms of geographic area, capitalization size, sector, or currency, as the case may be.

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 Sub-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 Sub-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, Commodities risk, Securities under Rule 144A / Regulation S. Capital loss risks: these Sub-funds are not a guaranteed product. You may not receive part or all of the initial amount invested. Considering the investment strategies that characterize the Sub-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:

Destination Value Total Return :

https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-value-total-return-rx-eur-accumulation-or-lu2185978587-distr-LU2185978587

Destination Dynamic Income Total Return:

https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-dynamic-income-total-return-rx-eur-accumulation-or-lu2597958268-acc-LU2597958268

Destination Capital Total Return:

https://www.plenisfer.com/it/it/professional/fund-page/plenisfer-investments-sicav-destination-capital-total-return-ix-usd-accumulation-acc-LU2717270206

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 Sub-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, Spain, Italy, Luxembourg, Portugal, and Singapore). 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: 1.47% per year (including management fee: 1.25%). This is an estimate based on last year's actual costs. Transaction costs: 1.14% 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. Ancillary 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: Entry 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: 1.34% (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: 0.43% 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, Italy and Luxembourg). One-time costs on entry or exit: Entry 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: 1.05% (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: 0.17% 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: 

Destination Value Total Return:

https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-value-total-return-rx-eur-accumulation-or-lu2185978587-distr-LU2185978587

 Destination Dynamic Income Total Return:

https://www.plenisfer.com/it/en/professional/fund-page/plenisfer-investments-sicav-destination-dynamic-income-total-return-rx-eur-accumulation-or-lu2597958268-acc-LU2597958268

Destination Capital Total Return:

https://www.plenisfer.com/it/it/professional/fund-page/plenisfer-investments-sicav-destination-capital-total-return-ix-usd-accumulation-acc-LU2717270206

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

SFDR Classification: The Sub-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 Sub-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 Sub-Funds, " Destination Value Total Return," "Destination Dynamic Income Total Return," and "Destination Capital Total Return" collectively referred to as "the Funds." This marketing communication is intended for investors in Italy, where the Funds registered, and are 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, investors must read the Prospectus, its SFDR Appendix and the Key Information Document (“KID”). The KIDs are available in one of the official languages of the EU/EEA country, where the Fund is registered for distribution, and the Prospectus/its SFDR Appendix are available in English (not in French), as well as 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. Information regarding the Facilities and the Distributor for your country is available at the following link: https://www.generali-investments.lu. The Management Company may decide to terminate the agreements made for the marketing of the Fund. A summary of your investor rights (in English or an authorized language) is available at www.generali-investments.lu in the section “About us/Generali Investments Luxembourg”. A summary of the SFDR Product Disclosures (in English or an authorized language) is available under the Fund page of the website in the “Sustainability-related disclosure” 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 trademark of Generali Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A. and Generali Investments Holding S.p.A. - Sources (unless otherwise specified): Plenisfer Investments SGR S.p.A. and Generali Asset Management S.p.A. Società di gestione del risparmio- This document may not be reproduced (in whole or in part), circulated, modified or used without prior written permission. 

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[1] Past performance does not predict future returns.

[2] Source: Plenisfer Invstments SGR S.p.A., data as of July 2025

[3] Source: Plenisfer Invstments SGR S.p.A., data as of July 2025

[4] Source: Plenisfer Invstments SGR S.p.A., data as of July 2025

[5] Source: Federal Reserve Bank of St. Louis, 27/03/2025

[6] Source: McKinsey, 06/2025

[7] Source: Institute of International Finance, 06/05/2025

[8] Asset allocation may be subject to change.

[9] Asset allocation may be subject to change.

[10] Asset allocation may be subject to change.