General Market Review
Overall, global equity markets finished December on a positive note. European indices and emerging‑market equities delivered solid gains. In contrast, the US S&P 500 Index was broadly flat for the month, and the NASDAQ—home to many US technology and growth stocks—declined. It was also a challenging period for developed‑market government bonds, with both US Treasuries and German Bunds posting modest losses.
As anticipated, the US Federal Reserve lowered interest rates by 25 basis points, bringing the target range to 3.5%–3.75%. This marked the third rate cut in 2025. However, policymakers appear divided on whether to pause further cuts in 2026, at least during the first quarter. Following the Federal Open Market Committee’s cautious communication, the probability of another cut in Q1 now stands at 44%, which would imply an effective rate of 3.5% compared with the current 3.64%.
The US labor market showed only marginal improvement. Non‑farm payrolls rose by +64k in November, following a decline of -105k in October. Meanwhile, the unemployment rate edged up to 4.6% in November. US consumer price inflation for November eased compared with the previous official reading in September: headline inflation increased by 2.7% year‑on‑year, while core inflation (excluding energy and food) rose by 2.6%.
In the Eurozone, November inflation figures were unchanged from the previous month. Headline inflation stood at 2.1%, and core inflation at 2.4%. Yields on US 10‑year Treasuries climbed by 16 basis points, from 4.01% to 4.17%, while German 10‑year Bund yields rose by 17 basis points, from 2.69% to 2.86%.The MSCI World Index gained +0.81% in USD terms, and the MSCI Europe Index advanced +2.67% in EUR terms.
Energy and Transportation
Brent crude continued its downward trend in December, ending the month about 3.75% lower at USD 60.85 per barrel. This brought the full‑year decline to roughly 18.5%, marking the steepest annual drop since 2020 and the first time the oil market has posted three consecutive years of losses. As negotiations toward a Ukraine peace agreement progressed, concerns grew that additional supply could further weigh on an already oversupplied market. During the month, oil prices fell to their lowest level since February 2021 — the height of the COVID‑19 pandemic, when demand collapsed. In this environment, European oil majors gave back some of the gains made in the previous month. The Stoxx 600 Oil & Gas Index slipped -0.1% (EUR‑denominated) by month‑end.
The Dow Jones Transportation Average rose +4.8% in December. Aviation led the sector, with the U.S. Global Jets Index up +7.7%, supported by strong holiday travel demand. The Transportation Security Administration (TSA) reported a record 122.4 million travellers during the year‑end holiday period (Dec 20–Jan 1). Analysts have also become increasingly optimistic about the sector’s prospects for 2026. Meanwhile, the Russell 2000 Marine Transportation Index declined by 2.0%.
In the crude tanker market, VLCC (Very Large Crude Carrier) rates fell sharply from USD 135k per day to USD 47k per day after an exceptionally strong quarter, as seasonal year‑end factors softened demand. With freight rates declining, investors reduced exposure to both crude and product tanker segments. The Baltic Dry Index dropped -26.7% over the month, with Capesize rates retreating to USD 25k per day. Mid‑sized vessels (Panamax) saw the steepest correction, with rates falling to USD 13k per day.
By contrast, the Shanghai Containerized Freight Index rose +18% in December. Even so, container spot rates remain -32.7% lower year‑on‑year. An early surge in demand ahead of the Lunar New Year likely boosted volumes, particularly on trans‑Pacific and Asia–Europe routes, where bookings have accelerated. Major container carriers have continued to restrict capacity on key lanes, enabling them to raise rates despite softer‑than‑usual demand.
Fund Performance
The fund posted negative returns in December across both its USD‑ and EUR‑denominated share classes. As crude tanker freight rates levelled off during the first half of the month, the fund further reduced its tanker exposure by selling its long position in Okeanis Ecotankers at USD 35.67. This realized a monthly gain of 2.6%, including dividends, since the position was initiated in November. In the freight services segment, the fund closed its short position in UPS at USD 95.10 per share and partially covered its short position in FedEx at USD 286.00 per share.
Month‑end performance attribution showed that within the energy segment, long positions in oil and gas exploration and production, oil services, and renewable energy generated gains of +1.4%, +0.4%, and+ 0.6% respectively. Vestas Wind Systems delivered a strong monthly return of 13.2%, supported by continued improvements in the company’s outlook. The fund holds an exposure of approximately +4.5% of NAV in this name. Short positions in the energy segment contributed a combined gain of +1.35%, with positions in the nuclear energy space accounting for +1.25%.
In the shipping segment, the fund maintained long positions in commodity shipping and offshore support, both of which detracted from performance. Long positions in dry bulk, crude/product tankers, and offshore supply returned –0.2%, –0.99%, and –0.95% respectively. Short positions in the container segment also weighed on results, contributing –1.1%. Overall, the long book in shipping detracted –2.1%, while the short book detracted –1.1%. In the aviation segment, long positions added +0.7%, helping to offset some of the losses incurred in the shipping sub‑sector.
For more information, you can find our latest Factsheet – December 2025.
Seahawk Investments GmbH
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