(LF) INCOME PLUS $ FUND LU0273967041

The investment objective of the Sub-Fund is to invest its assets primarily in bank deposits and money market instruments (principally denominated in US dollar or other currencies linked to the US dollar). Secondarily the Sub-Fund invests in investment and non investment grade transferable debt securities (incl. fixed and variable interest rate securities) such as government bonds and corporate bonds, admitted to an Official Listing or dealt in on a Regulated Market and denominated in US dollar or other currencies hedged against the US dollar, as well as in structured financial instruments and financial derivative instruments for the purposes of efficient portfolio management or hedging. The Sub-Fund is not allowed to invest in equity securities. Liquidities, undertakings for collective investments, financial derivative instruments, structured financial instruments, securities lending and repurchase agreements may be used within the limits described in sections 3.1. and 4. in the full Prospectus.

The first quarter of 2026 brought a notable shift in US fixed income markets, transitioning from expectations of monetary easing to a more defensive stance against renewed inflation. A geopolitical energy shock stemming from the Strait of Hormuz blockade pushed Brent crude futures over $115 per barrel , while physical oil reached $148.87. This supply-side disruption cascaded into US inflation, with the Consumer Price Index (CPI) rising to 3.3% year-over-year in March, largely driven by a 10.9% increase in the energy index. Consequently, the US Federal Reserve maintained the federal funds target rate at 3.50% to 3.75%, signaling a "higher for longer" policy approach. The US Treasury yield curve experienced a bear flattening—a scenario where short-term rates rise faster than long-term rates or long-term rates rise alongside short-term rates but at a different pace. Specifically, the 10-year yield rose to 4.31% by late March , compressing the spread between the 10-year and 2-year yields to just 51 basis points and leading to price declines across longer-duration asset classes. Despite the shifting rate environment, the fund recorded persistent inflows throughout the quarter, with total Assets Under Management growing steadily from roughly 69.55 million to 71.84 million. The fund's Net Asset Value (NAV) experienced a slight contraction alongside the broader market, generating a normalized return of -0.0862% over the quarter. This performance slightly trailed the relevant market segment as depicted by the ICE BofA 1-3 Year US Corporate & Government Index (B1A0), which posted a total local return of 0.3032%. This divergence was largely tied to interest rate sensitivity rather than credit deterioration. In a rising rate environment, the negative price returns (capital declines) of the underlying assets can sometimes outpace the positive income returns (coupon payments) they generate.

To navigate this volatility, the portfolio's structure was notably adjusted through active duration management. Duration measures a bond's price sensitivity to interest rate changes. Early in the quarter, when yields were declining, the portfolio's modified duration was extended. While this stance was initially beneficial, it exposed the fund to capital declines when energy shocks abruptly pushed yields higher in late February. In response to the changing macroeconomic landscape, the portfolio underwent a structural shift to prioritize income generation and limit rate risk. The allocation to US corporate debt was notably increased, ending the quarter with an overweight notional exposure of approximately 59.72%. Concurrently, the fund's total government exposure was recalculated and adjusted to represent 52.55% of the portfolio's weight. By actively managing the internal composition of this overarching government exposure, its weighted duration contribution to the portfolio was effectively reduced to 0.72. This deliberate duration adjustment within the government allocation helped insulate the broader portfolio against further yield curve flattening while preserving the higher yield generated by the corporate credit holdings.