Yves Bonzon

At the end of October, we decided to tactically hedge a portion of our US dollar exposure against the Swiss franc (CHF) in portfolios denominated in the Swiss currency, as we believe the dollar is currently overbought, especially against CHF. This move follows an extended period since the beginning of the year in which we were overweight the USD in CHF-based portfolios due to our conscious decision not to hedge this currency exposure. Strategically, we continue to welcome USD exposure, particularly for the diversification it provides during periods of market turbulence, and we remain overweight the greenback in the other currency profiles.

Structurally, we continue to prefer shrinking over expanding asset classes, ie cash-returning over cash-raising mechanisms. US large-cap equities, for example, are a shrinking asset class, as they persistently return more capital to investors than they raise from them – a very favourable supply-demand situation. The number of listed domestic companies in the US has halved since the turn of the century due to fewer IPOs, de-listings and increased M&A activity. 

Additionally, since the early 2010s, the US equity market has seen a sustained increase in share buybacks. These trends are unlikely to be reversed. This view extends beyond public equity markets. The record issuance levels of public debt instruments, particularly in the US, are a cause for concern, while other fixed income segments such as US high yield bonds exhibit more attractive, ie regressive, supply dynamics. Judged through this lens, gold and bitcoin also have some appeal given the limited supply.

The podcast interview with world-renowned French scientist Yann LeCun: Listen here.

LeCun does a good job of explaining complex subjects in laypeople’s terms and shares a number of important points. For example, he mentions the fact that when ChatGPT was revealed to the broad public in November 2022, AI experts were not surprised by the chatbot itself, but by the public’s burst of enthusiasm for something that they see as just another step on the long scientific road to human-like machine intelligence.

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