GLOBAL EQUITIES FUND LU0273960111

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.

Global stock markets in the developed world enjoyed gains during the second quarter of the year. The AI investment theme continued to capture investors’ attention while the easing of geopolitical tensions, with the US and Iran agreeing to a 60-day ceasefire to work out a more detailed and permanent peace agreement, contributed to positive investor sentiment. In the US, the stock market rallied impressively, driven mainly by gains in the Information Technology sector, led by semiconductors and AI infrastructure companies as investors continued to focus on the huge potential of AI and the massive investments being made in the sector. Memory chip stocks soared as persistent bottlenecks pointed to higher prices for longer. Furthermore, the US economy has proven resilient with both economic activity and the labor market holding up well. As a result, corporate earnings were robust while market participants became more optimistic regarding the outlook for inflation and further economic growth. Kevin Warsh was sworn in as the new FED chair and the market tried to ascertain whether monetary policy would change and to what extent. In Europe, eurozone equities also performed well where the Information Technology and the Financials sectors stood out. On the flip side, the Energy sector retreated significantly as the price of oil declined to levels seen before the outbreak of hostilities between Iran and the US and Israel. The ECB raised interest rates by 0.25 percent in June due to increased inflationary pressures caused by the increase in energy prices due to the conflict in the Middle East. Lastly, in Japan the stock market also rallied significantly. It should be noted that while the Topix Index registered substantial gains during the second quarter the tech-heavy Nikkei rallied impressively outperforming the Topix handily.

The Sub- Fund maintained an effectively neutral stance throughout the second quarter of the year. The Sub- Fund, also, had a more neutral stance at the beginning of the second quarter but increased to a basically fully invested level during the quarter before decreasing its investment level somewhat towards the end of the second quarter. The overall broader investment themes and sector allocations were broadly in line.In the US, at the beginning of the second quarter, the Sub -Fund added to their exposure to memory chip stocks as the bottlenecks in AI investments appeared to persist. The Sub- Fund reduced, to a certain extent, their exposure to the US defense industry as despite the need for increased spending in the sector to replenish weapons stockpiles the funding and the capacity to produce materially increased quantities of weapons were not assured. The Sub- Fund, also, decreased their exposure to the energy sector as the price of oil retreated substantially as geopolitical tensions eased. Moreover, the Sub-Fund increased its exposure to the Information Technology sector. The Sub-Fund added exposure to the Basic Materials sector. The Sub-Fund was positive on certain large investment banks due to the very large IPOs expected to come to market during the year. Lastly, the Sub- Fund reduced its exposure to the telecoms sector. In Europe, the Sub-Fund was more cautious on European exposure at the beginning of the quarter when oil prices were elevated due to the European economy’s larger sensitivity to oil prices. The Sub-Fund turned more constructive on Europe, though, as the quarter progressed as geopolitical tensions eased and consequently the price of oil declined while valuations appeared more attractive. The Sub-Fund increased exposure across various sectors. Luxury stocks appeared oversold and the Sub-Fund added exposure somewhat. The Sub-Fund also added to the banking sector. On the other hand, it decreased exposure somewhat to the European defense sector. The Sub-Fund also eliminated a position in the chemicals sector as certain positive catalysts appeared to have been priced in. In Japan, the Sub-Fund kept their exposure broadly stable and maintained a relatively moderate stance on the Japanese Equities market.