Postbank

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.

Globally, equities in developed markets ended the second quarter of the year with gains despite the steep declines that followed the announcement of tariffs on so-called “Liberation Day” on April 2nd. Equities managed to stage a significant comeback after President Trump suspended most tariffs until July 9, while negotiations over trade relations took place. In the US, in USD terms, equity markets ended significantly higher led mainly by certain of the “Mag 7” stocks as interest in the Artificial Intelligence trade reignited. US shares were also supported by generally strong corporate results for Q1. The Healthcare and Energy sectors were among the underperformers. The US economy, and particularly the employment market, remained robust lending further support to equity market performance. In Europe, Eurozone shares for the most part also ended Q2 with significant gains. The Industrials sector was among the best performing, in particular the defense sub-industry group continued to perform well, as NATO countries agreed in principle to increase defense spending. Similar to the US, the healthcare and energy sectors were among the underperformers. The Japanese equity market posted strong returns amid ongoing trade negotiations. Corporates issued cautious guidance but increased dividend payouts and buybacks, which led substantial support to the equity market and pushed it higher.

At the very beginning of the second quarter the Fund was close to fully invested, in terms of total investment level. Nevertheless, the Fund was more cautious on the US equity market in anticipation of “Liberation Day” on April 2nd when President Trump was set to announce his tariff plans. Consequently, in the US the Fund was more cautious in terms of its level of exposure but also in terms of sector allocation. The Fund at the beginning of April had turned more defensive increasing its exposure to the consumer staples, telecoms and utilities sectors while decreasing its exposure to financials. Valuations were more appealing after the correction and the market rebounded as President Trump hit pause on the implementation of tariffs for 3 months initially. Further, the Fund during May reduced its exposure to the consumer staples sector. Towards the end of June, the Fund increased anew its exposure to the financials sector ahead of US banks announcing their Q2 earnings in July. In Europe, the Fund also turned more defensive in April reducing exposure to the information technology and luxury sectors. Overall though the Fund maintained a more favorable exposure to European equities. Towards the end of April, the Fund initiated a position in the auto sector as valuations had become very inexpensive and sold out of a specific utilities company following a blackout that occurred in Spain and Portugal. The Fund also gradually reduced and eventually completely sold out of certain position in the defense sector, taking substantial profits. At the end of the quarter, the Fund decreased its overall exposure to European equities in part due to renewed tariff concerns. Lastly, in Japan the Fund maintained a more cautious approach for the most part during the second quarter of the year. The Japanese equity market, though, did post positive returns amid ongoing trade negotiations. Also, corporates increased dividend payouts and buybacks lending further support to the equity market. Thus, this more cautious approach did not benefit the Fund’s performance.