General Market Review
October was another strong month for risk assets; equities broadly continued their rally which was fueled by signals of easing in the US-China trade war. In that environment the S&P 500 rose 2.3% and the Stoxx Europe 600 advanced 2.5%. Apart from the strong market performance, the IMF warned in the October edition of its world economic outlook of elevated vulnerabilities and reiterated that risks are tilted to the downside: Prolonged global trade uncertainty, shocks to labor supply and a repricing of new technologies are some of the major risks mentioned therein. Rising fiscal worries could lead to increasing borrowing costs and overall debt level and could erode the convenience yield on the sovereign debt of some advanced economies. A repricing of core government bond yields could be amplified by maturity mismatches and leverage among non-bank financial intermediation that could trigger disorderly price corrections. According to the IMF, global growth might slow down to 3.2% in 2025 and 3.1% in 2026. The projections for 2026 are divided: The US was revised up from 1.7% to 2.1%, the Euro Area was revised down from 1.2% to 1.1%. China, on the other hand, experienced an upward revision from 4% to 4.2%. On October 29, the FED’s board of governors unanimously approved a rate cut of 25 Bp bringing down the policy rate to 3.75% (lower bound) to 4.0% (upper bound). Since the likelihood of a 25 Bp rate cut was at 99% ahead of the meeting, this was fully in line with market expectations. Again, the FED reiterated the data dependency and pointed out a December rate cut would not be a foregone conclusion. This is partly because of the lack of reliable economic data during the US government shutdown. As of October 31, the probability of a December cut decreased from 78% to 68%. This corresponds to an effective rate at 3.71% versus 3.86% currently.
In the US, there was no release of non-farm payrolls due to the shutdown. However, the employment report published by ADP gave an indication that labour market may have shrunk. In the Eurozone, the unemployment rate was stable at 6.3%.In the US, consumer price inflation for the month of September was slightly higher versus the prior month. Headline inflation has increased by +3.0% (y-o-y) whereas core inflation (excluding energy and food) came in lower at +3.0% (y-o-y). In the Eurozone, consumer price inflation figures for the month of September were higher versus the prior month. Headline inflation has increased by +2.2% and core-inflation has increased by +2.4%. US 10-year treasury yields decreased by 7 Bp from 4.15% to 4.08%, whereas German 10-year bund yields have decreased as well by 8 Bp from 2.71% to 2.63%.
The MSCI World Index increased by +2.0% (USD den.) and the MSCI Europe Index rose by +2.55% (EUR den.).
Energy and Transportation
Following OPEC+’s decision to implement a modest production increase of just 137k barrels per day for November, Brent crude prices remained relatively stable at the start of the month. However, after the International Energy Agency (IEA) released its mid-October report, prices dropped to a five-month low of $61 per barrel. The IEA highlighted a significant crude oil surplus of approximately 3.2 million barrels per day, projected to persist through June 2026. This oversupply was largely driven by increased stockpiling in China and other economies, pushing global inventories to a four-year high. By month-end, Brent prices had rebounded slightly to $65, although the overall trend remained downward.
In this environment, exploration and production companies saw declines. Conversely, major oil firms such as Total, Shell, and BP continued to deliver strong monthly returns. Total Energies reported its quarterly earnings, showing a 60% year-over-year increase in net income for the first nine months, reaching $3.7 billion, despite a drop in revenues. This was largely attributed to improved refining margins. The Stoxx 600 Oil and Gas Index rose by 6.0% (EUR-denominated) by the end of the month.
After four years of price corrections, the renewable energy sector showed robust performance throughout the calendar year. Wind turbine manufacturers benefited from strong order volumes and improved profitability. The S&P Clean Energy Index rose by +11.9% in October and is up +53.7% year-to-date.
In a broadly positive market environment, the Dow Jones Transportation Average Index (USD) gained 1.1%. However, the aviation sub-sector declined due to lowered Q3 earnings expectations, with the US Global Jets Index (USD) falling by -0.3%.
Marine transportation saw notable gains, with the Russell 2000 Marine Index up 6.8%. VLCC (Very Large Crude Carrier) rates surged from $76k/day to $122k/day by month-end, driven by increased production and a rise in global “oil-on-water” volumes, which climbed from 1.1 mn. barrels in August to 1.3 min. barrels. In the container shipping segment, the Shanghai Containerized Freight Index (SCFI) reversed its downward trend, posting a 39% month-on-month increase, though it remains 33% lower year-on-year. Meanwhile, Capesize rates in the dry bulk segment softened from $27k/day to $24k/day.
Fund Performance
The fund delivered positive returns across both USD- and EUR-denominated share classes.
At the beginning of the month, the long position in Technip Energies was reduced by approximately one-third to 4% of NAV, at a share price of €40.00. This adjustment aimed to lower exposure to the energy services segment and mitigate issuer-specific risk. Additionally, the entire long position in Valaris, representing 1.5% of NAV, was exited at a share price of $57.26. Profits were also realized from the position in crude tanker operator Frontline, sold at an average price of $23.20, as the stock was trading at 130% of its Net Asset Value. These transactions collectively reduced the fund’s exposure to oil price-sensitive assets by roughly 10% of NAV over the month.
A new position was initiated in the dry bulk segment through Star Bulk Carriers, acquired at $17.50 per share. The company was trading at a 30% discount to its NAV. The dry bulk sector is expected to benefit from rising iron ore and bauxite shipments originating from West Africa, with larger vessel classes such as Capesize and Kamsarmax likely to see increased demand.
The fund’s month end performance attribution was as follows. Within the shipping segment the long book had a positive contribution of +1.5%, whereas the short book had negative performance contribution of -0.2%, respectively. Long positions in the crude/product, dry bulk and offshore supply segments contributed +1.6%, +0.1% and -0,2% respectively. Short positions in the container segment contributed -0.2%. In the long book the strongest performers were Teekay Tankers and International Seaways. On the other hand, short positions in the freight services segment contributed a negative -0.5%. The long and short book in other transportation sectors have contributed 0% and +1,8% respectively, whereas within aviation it was at -0.4 % for long positions and +0.1%for short positions respectively.
Within the energy segment, long positions in the oil and gas exploration and production sector recorded a loss of -1.4%. These losses were partially offset by gains of +0.3% from short positions in the same sector. The oil services segment contributed positively with +0.1%, while the renewable energy sector added a further +0.6%. Overall, hedging positions through short index futures had a negative impact of -0.2%.
For more information, you can find our latest Factsheet – October 2025.
Seahawk Investments GmbH
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