Midyear Portfolio Review: The Rotation Worked. Europe Didn't.

× In December I rebalanced my portfolio around five theses for 2026. Five months in, this (early; well just too much happened) midyear review puts four of them ahead of where I expected and one well behind. The one I had the most conviction in, an overweight in European equities by five percentage points, has trailed every other rotation it was meant to beat. Portfolio performance so far Through May, the portfolio is up +3.7% in CHF on a time-weighted basis. A fairly-constructed 60/40 benchmark (60% MSCI ACWI in CHF, 40% global aggregate bonds CHF-hedged) is up +3.8%. The S&P 500 in CHF, total return: +5.8%. × The 2025 outperformance, when this same approach beat the S&P 500 by a wide margin in CHF terms, was driven by the dollar’s collapse against the franc. USDCHF fell 11.5% last year. So far in 2026 it has fallen 1.5%. The FX tailwind that made the CHF-hedged strategy look brilliant is gone, and the portfolio is doing what it should in a year when the diversifier isn’t needed yet:…