The investment objective of the Sub-Fund is to invest its assets primarily in transferable debt securities (mainly Sovereign and investment grade corporate bonds, denominated in Euro, USD and other major currencies), issued in Europe and North America, admitted to an Official Listing or dealt in on a Regulated Market worldwide. Secondarily the Sub-Fund may invest up to 15% of its net assets in sovereign and investment grade corporate bonds in other world markets. Emerging markets currency exposures is limited to 15% of the Sub- Fund’s net assets. The Sub-Fund may invest up to 10% of its net assets in mortgage-backed securities and asset-backed securities. Additionally, the Sub- Fund invests in bank deposits, and money market instruments, of European banks and major corporates. The Sub-Fund can also invest in structured financial instruments, as well as in financial derivative instruments for the purposes of efficient portfolio management or hedging.

European bond markets experienced a particularly turbulent fourth quarter in 2025. Nevertheless, they closed the year with a positive return, mainly driven by the income component, which more than offset mild capital losses. At the same time, a slight compression of spreads of 5 basis points was recorded in medium-term bonds, as reflected in the ICE BofA 3–5 Year Euro Broad Market Index.

The portfolio’s positive performance was driven by the broadly risk-on, overweight positioning, particularly in corporate credit sectors, which outperformed government bonds. Security selection delivered mixed results, while unfavorable yield curve positioning toward the end of the year—especially at longer maturities—created some negative pressure on the Sub-Fund’s performance. The corporate segment of the portfolio remained the dominant source of exposure, both in nominal terms and in terms of duration. Overall, an overweight position in corporate bonds was maintained relative to the benchmark. The portfolio’s overall duration stood at 4.27 at the beginning of the quarter and was gradually reduced to 3.57 by year-end.