• The last quarter of 2023 saw a significant shift in expectations for US bond yields, with the Fed signalling potential rate cuts, leading to a strong rally in both bonds and equities
• Despite the overall market rally, the fund underperformed due to idiosyncratic factors, including specific setbacks in healthcare stocks as well as challenges faced by Exelon in the utilities sector
• The equity market is in a transition phase as it adjusts to the changing interest rate environment, marked by a year-end rally that has narrowed the margin of safety in equity valuations, particularly in growth and cyclical sectors

The last quarter of 2023 saw a marked shift in direction and expectations for US bond yields. The Federal Reserve’s final two meetings of the year signalled a distinct change of tone and raised expectations of rate cuts in the first half of 2024. As a result, both bonds and equities rallied hard. Having risen from 1.2% in early May, the real yield on US Treasury Inflation-Protected Securities peaked at 2.5% in late October and fell sharply back to 1.7% by the end of the year. BBB corporate bond spreads fell back below 1.5% for the first time since early 2022.

The fund underperformed during the quarter. Sector allocation was a headwind, given tech leadership in November and utility underperformance in October, but the major detractors from performance were fairly idiosyncratic. Sanofi fell 19% in late October after announcing a rise in R&D spending, which would result in them missing previously-set targets for margin expansion. We understand the scepticism about R&D productivity in the pharma sector, but in general, we see it as a positive when companies commit to investing for growth, and we found some reassurance on the R&D day in December. Also, in the healthcare sector, Merck KGaA fell 13% in early December after the failure of one of their pipeline drugs. We do not view this news as particularly material to the investment case, which rests more on the prospects for shortterm recovery and long-term growth in their life sciences and electronics divisions.

We continue to believe that equity markets are in a transition phase as they digest all of the implications of returning to an environment where money has a cost. This is likely to entail periods of elevated financial market volatility. The year-end rally has reduced the margin of safety in equity valuations, especially in growth and cyclical parts of the market.

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.