The investment objective of the Sub-Fund is to invest its assets primarily in equity securities and other equivalent securities of companies admitted to an Official Listing or dealt in, on a Regulated Market in developed countries of Europe, USA and Asia.

Equities in developed markets realized gains during the third quarter of the year as equity markets continued to rebound following the uncertainty and increased volatility that “Liberation Day” had unleashed. Volatility remained low, investor interest in AI names remained robust while corporate earnings were solid overall. The FED in a strongly anticipated move lowered interest rates. These developments led to substantially higher markets. In the US, the stock market realized gains during the third quarter with two of the major indices reaching new highs. The FED cut interest rates for the first time since December 2024 with further interest rate cuts expected by the end of the year. The Information Technology and Communication Services sectors were among the best performing while the Healthcare and Energy sectors lagged. The US economy remained resilient, despite tariffs, as consumer spending remained solid. US GDP numbers were revised in late September. According to the revised numbers, the US economy expanded by 3.8% during the second quarter of the year. In Europe, most equity markets realized gains during the third quarter of the year. The Banking sector stood out again as shares in the sector soared underpinned by robust earnings. Inflationary pressures appear to have subsided in the Eurozone with inflation in line with the ECB’s target of 2% in August. During the third quarter, the European Union reached a trade agreement with the US, largely removing a significant source of uncertainty. Nonetheless, not all details have been clarified. Lastly, political uncertainty has flared up in France with a budget yet to be passed. In Japan, the stock market rallied significantly with both major indices reaching new highs. Returns were a bit less in euro terms, as the yen weakened, but were nonetheless significant. Robust corporate earnings, share buybacks and increased dividends supported the equity market’s positive returns.

During the third quarter of the year, the fund was effectively fully invested for the duration of the quarter. Stock markets in developed countries realized gains during this period where trade tensions and uncertainty were not in the forefront as much. Equity markets focused on the continuing strength of the AI trade, robust corporate earnings and increased anticipation of the FED cutting the policy rate. In the US, certain major indices reached new all-time highs underlining the strength of the US stock market. At the beginning of the third quarter, the fund was well positioned. The increased exposure to Nvidia was one of the positions that benefited the fund’s performance. The fund had also somewhat increased their exposure to US large cap financials in light of anticipated regulatory changes and possible increased payouts following their annual stress tests. The fund preferred the Information Technology and Financials sectors. After the middle of the quarter, the fund reduced its overall exposure to the IT sector but retained a positive stance on certain specific names, such as NVDA, MSFT and META. Despite the correction that occurred for about two weeks after mid-August in these names, as investors rotated from growth sectors towards more value sectors, eventually most of these stocks rebounded during September. During September, the fund maintained a relatively lower overall level of investment in the US. In Europe, the fund remained fully invested during the third quarter. The fund did not have a significant regional preference between the US and Europe for the most part during the third quarter. The fund adopted a sectoral preference, preferring the Information Technology and Financials sectors. In Europe, the fund also gradually added certain new positions such as AstraZeneca in the Healthcare sector and ABB, which posted stellar results for Q2 and was expected to continue to benefit from increased demand due to the buildout of data centers. Lastly, the fund remained fully invested in Japan and indeed increased their exposure further towards the end of the quarter. During July, the fund sold their exposure to certain individual stocks and increased their investment to the broader market. The Japanese equity market realized substantial gains during the third quarter with both main indices reaching new highs.