New York City, NY – Global equities experienced a period of volatility during the quarter, ultimately ending with positive returns. The decrease in inflation led to rate cuts by several central banks, including the anticipated move by the US Federal Reserve. In this environment, emerging market equities saw positive performance, particularly with a late-quarter rally in Chinese stocks due to economic stimulus measures. However, equities in Mexico, South Korea, and Turkey faced declines for various reasons.

Interest rate-sensitive small-cap stocks benefited from recent rate cuts, while the energy sector struggled amidst falling oil prices. With ongoing geopolitical tensions and upcoming elections, there are potential risks for global equities in the coming months, leading investors to focus on high-quality investments with solid fundamentals.

During the quarter, the fund made notable changes to its portfolio, initiating positions in companies like Trip.com, Prio, Cyient, and Sunresin New Materials. Notably, the fund divested from Kimberly-Clark de Mexico due to concerns over profit margins and growth prospects. Additionally, a position in MakeMyTrip was trimmed based on valuation considerations.

Performance review highlighted the fund’s outperformance in healthcare holdings and financials, while underperformance in consumer discretionary and information technology sectors impacted results. Geographic positioning also played a role, with overweights in the Philippines, Thailand, and Hungary contributing positively to returns.

Top contributors to performance included BDO Unibank, Gedeon Richter, and Tongcheng Travel, while detractors included Samsung Electronics, MediaTek, and Walmart de Mexico. Each company faced unique challenges and opportunities that impacted the fund’s absolute return for the quarter.

Looking ahead, uncertainties in the market, coupled with geopolitical factors, suggest that investors may face continued volatility. The fund’s strategic positioning and disciplined approach to portfolio management aim to navigate these challenges and capitalize on opportunities in the dynamic global market landscape.