In US dollar terms, equity markets rallied strongly in the first two months of the quarter before fading in December. However, the dollar fell significantly against most major currencies, meaning that equities were up much less in sterling and euro terms. US 10 year treasury yields ended the quarter roughly where they started it, around 3.8%, but there was a tremendous amount of volatility over the quarter, ranging from over 4.2% to nearly 3.4%, as uncertainty continued about the medium-term outlook for inflation and interest rates. Energy prices continued to retreat as hopes rose for a resolution in Ukraine, and the copper price rose on expectations that relaxation of zero-Covid rules in China would prompt an economic recovery.

The quarter saw significant outperformance by cyclical sectors (Industrials, Materials, Energy and Financials), while the virtual world winners of recent years (Technology, Media and Consumer Discretionary) resumed their underperformance after the brief summer rally. Regionally, Europe was particularly strong, helped by currency strength and a sector mix much less exposed to technology and related sectors than either the US or Emerging Markets. These trends helped the fund outperform, given our sectoral and regional positioning relative to the index. Notably, the three most significant contributors to our outperformance were stocks we didn’t own - Tesla, Amazon and Apple1. In terms of active contributors, it was pleasing to see the outperformers came from a wide range of sectors and geographies, testimony to our ‘forgotten middle’ thesis. We also note underperformance from Cameco, which is partly a reversal of the previous quarter’s outperformance.

The outlook for medium-term investment returns is significantly better than it was twelve months ago. We are clearly past the peak of rampant speculation and widespread complacency; markets are no longer extrapolating an unsustainable set of circumstances, growth rates or discount rates. TIPS yields are positive again, credit spreads have widened materially and equities have derated. Given the excesses built up over many years, we think it is likely to take more than twelve months to unwind them. Equity indices remain unusually concentrated and are still dominated by the winners of the last cycle. For example, the top 250 companies in the MSCI ACWI Index still have a combined weight above 60%. Meanwhile, we would not describe equity valuations, at an aggregate level, as particularly cheap. We may be approaching a ‘widely anticipated recession’, but someone needs to tell the sell-side analysts, because we haven’t seen many downgrades yet. We remain in a tightening cycle and, longer term, a more inflationary environment, meaning that cycles are likely to be shorter and volatility higher than in the 2010s. Equity investors need to remain vigilant about all three major risks: derating, downgrades, and refinancing. Our strategy for navigating this environment is unchanged – we will act with patience and discipline but take advantage of the opportunities which are created by volatility.

Sources for all data: JOHCM/Bloomberg (unless otherwise stated).

1. Listed names are non-benchmark stocks

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 EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

*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.

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 EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

*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.