Federico Sellitti @federicosellitti: "Market and portfolio update –..."

United Kingdom

Market and portfolio update – 12/12/2025 Dear investors, November was a good month, closing with a return of +1.97%, and December has started on the same note, currently at +1.15%, despite the massive sell-off seen today. What’s more impressive is that we maintained a risk score of 2, with only brief peaks at 3, and our worst daily drawdown was limited to -0.35%. I’m particularly satisfied with these results because investing is also about peace of mind. Knowing that if markets experience a sharp correction, your capital remains protected is a trait not to underestimate when investing your hard earned money. That is exactly what we are achieving. How is the market doing? Markets have been under some pressure lately due to macroeconomic data. Growth models influencing U.S. GDP forecasts point to slowing growth in 2026, with 2027 and 2028 potentially even weaker. Inflation currently stands at 2.9%, still above the Fed’s 2% target, while unemployment has reached 4.4%. This creates a difficult balancing act for the Federal Reserve, and there is visible disagreement among its members: some favor holding rates steady, while others believe further cuts are necessary. Looking at November’s data, it is also interesting to note that a rotation appears to be underway toward value stocks and small caps. I'm not a fan of small caps, but we already took some opportunities among strong value stocks. Real estate is another area on my radar, as it remains heavily undervalued and could benefit significantly from lower interest rates. For now, I am maintaining a cautious stance, with 29% of the portfolio in bonds and 26% in cash. Another factor reinforcing this cautious positioning is that 2025 has been the year of AI. AI-related stocks have generated exceptional returns and have been the primary drivers of the market. Recently, however, they have started to lag relative to other sectors. A clear signal is that the $NSDQ100 (the U.S. tech index) is the only one of the three major indices ( $SPX500 and $DJ30 being the other two) that has failed to reach a new all-time high during this recovery phase. Today’s moves confirm this narrative: $AVGO (Broadcom Inc) -11.5%, $TSM (Taiwan Semiconductor Manufacturing Co Ltd - ADR) -4.25%, $NVDA (NVIDIA Corporation) -3.30%. I like where we stand right now. Thanks for reading and have a good weekend!