• The last quarter of 2023 featured a volatile market, starting with an October selloff, a strong November rebound and a complex December rally
• Positive contributors included financials and real estate, driven by strategic stock selection, while energy sector underperformance reflected our absence in oil and coal stocks
• Our cautious approach persists amid scepticism of an early Fed pivot, sensitive elections due in 2024 and geopolitical uncertainties, despite broader positive market trend

The final quarter commenced with an October selloff, marked by notable volatility, partly echoing declines seen in Europe. Subsequently, November witnessed a significant and volatile rebound, countering the exaggerated October downturn. Finally, December brought a more traditional Christmas rally, albeit with some complexity. This period involved substantial repositioning, profit-taking in high performers, and notable short-covering in underperformers.

On the positive side, the best sector for us in the quarter was the real estate sector, where we had an overweight allocation and stock selection was superior. The utilities sector also contributed positively, albeit through an underweight allocation. The volatile and chaotic market shifts at the end of the year, primarily characterised as rebalancing through rapid short covering in laggards and profit-taking in winners, benefited the strategy in India. India was our strongest performing country for the quarter and our largest country allocation. The aforementioned real estate sector positions mainly drove the performance. Brigade Enterprises in India emerged as a significant winner, while Varun Beverages, a provider of soft drinks, also contributed. Our overweight posture in information technology provided additional drivers to performance with HPSP, a niche manufacturer of semiconductor equipment, driving positive performance.

In late December, significant shifts in global positioning were unfolding. Yields in the US experienced a rebound, following the prior correction, aligning with the prevailing interpretation of the Fed’s ‘pivot,’ and the US dollar also saw a resurgence. This resulted in a culmination of adverse movements for us on that day, impacting both the tech sector (affecting Taiwan and South Korea) and gold.

Examining the downside of Q4, Taiwan was the major detractor despite an underweight allocation. The aforementioned volatility disrupted our stock selection in the Taiwan-based IT sector due to significant profit-taking. China was another detractor to performance due to the continuing weakness in the country’s domestic economy. The most significant detractors for the period were One97 Communications, an Indian payment solutions provider, ZJLD Group, and Genus Power Infrastructures, an Indian smart meter manufacturer.

In conclusion, we maintain a cautious stance from a top-down and macroeconomic perspective. We remain somewhat sceptical of an overly hasty Fed pivot, and we are navigating through sensitive elections and ongoing geopolitical conflicts. However, the overarching trend toward interest rate normalization, with a subsequent gradual and measured decrease, currency stabilization, supply chain reconstruction, the increasing prevalence of nearshoring, and significant valuation disparities should collectively benefit both emerging markets and growth assets.

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization index that is designed to measure the performance of small capitalization equities in the emerging markets. The MSCI Emerging Markets Small Cap Index includes small cap representation across 23 Emerging Markets countries. Investing in an index is not possible.Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Historical performance of the Emerging Markets Opportunities Fund for Class II Shares prior to its inception is based on the performance of Class I Shares, the share class most similar to Class II. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

Fund holdings, sector allocation, regional allocation and top 10 countries are subject to change without notification.

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization index that is designed to measure the performance of small capitalization equities in the emerging markets. The MSCI Emerging Markets Small Cap Index includes small cap representation across 23 Emerging Markets countries. Investing in an index is not possible.Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Historical performance of the Emerging Markets Opportunities Fund for Class II Shares prior to its inception is based on the performance of Class I Shares, the share class most similar to Class II. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.