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Equities Commentary, May 2020

Please find below a summary of performance, activity and outlook from our Portfolio Managers.

Jonathan Pines Portfolio Manager

Market and Performance review

The benchmark MSCI All Countries Asia ex Japan Index returned -0.87% in May. The Fund underperformed the benchmark over the month. The underperformance was driven by stock selection and the associated currency exposure from our China holdings. Stock selection in Hong Kong also detracted, offsetting positive stock selection in Thailand.

Nexon, a Japanese-listed online game developer that derives the majority of its earnings from Asia ex Japan, rose after reporting strong Q1 results that beat on profit expectations driven by a strong performance in South Korea. MediaTek, a Taiwanese chip supplier, rose sharply after the US moved to tighten restrictions on Huawei by barring chipmakers using American equipment from supplying Huawei without approval. MediaTek, viewed as an alternative supplier, is seen as a beneficiary of the restrictions. Youngone Corporation, a Korean manufacturer of outdoor clothing and products, rose as investors were encouraged by plans to reopen apparel stores.

CK Hutchison, a Hong-Kong based conglomerate of telecommunications, infrastructure, global ports and energy, fell amid the renewed protests in Hong Kong and a resumption of the US-China trade rhetoric despite a small part of its earnings being derived from Hong Kong. ASE Technology, a Taiwanese semiconductor packaging and testing services company, fell on concerns over the subsequent impact of the restrictions placed on Huawei. However, ASE’s products have a relatively low contribution from Huawei. Weibo, a Chinese social media company that is listed in the US, fell amid the US government focus on Chinese ADRs despite posting results that were in-line with expectations.

Outlook

During the month, Value stocks began outperforming Growth stocks in the US and Europe (although not Asia). The relative performance remains volatile and it is impossible to tell if this is the beginning of a reversal or simply a technical blip driven (for example) by short covering. However, it provided a welcome change from the preceding months, and if sustained, might be a precursor to a more encouraging backdrop in Asia, where Value continues to underperform.

James Rutherford, Portfolio Manager

Market and Performance Review

An easing of lockdown restrictions and France and Germany’s proposed European Recovery Fund, which aims to support countries worst affected by the coronavirus pandemic, boosted European equities in May and prompted the MSCI Europe Index to return 2.95%. The Fund outperformed the benchmark index in the period. The largest contributions came from stock selection in Financials and our overweight position in Information Technology and underweight in Consumer Staples. These offset the detractions from selection in Energy and Health Care.

Pandora, Adidas and Lonza Group were the largest individual contributors. Pandora increased following better-than-expected results that provided evidence that its turnaround initiatives are starting to take effect. Adidas rose as the lockdowns eased, while anecdotal evidence suggested that athleisure had benefited from more people working from home. Lonza Group gained after announcing a global collaboration with Moderna to manufacture its proposed coronavirus vaccine.

Sodexo, ConvaTec and Prudential detracted the most. Sodexo fell on concerns that working from home would reduce demand for its catering services. ConvaTec raised cash through a sale of additional shares, which were priced at a discount. Prudential fell alongside stocks exposed to Hong Kong, as civil unrest erupted in response to China’s plans to implement a national security law; something that effectively ends the “one nation, two systems” arrangement that has maintained Hong Kong’s autonomy since 1997.

Outlook

Despite the strong market rally since the end of March, there are reasons to believe that markets are well supported. European equities still remain substantially lower than they were at the start of the year, while low interest rates and a lack of attractive alternatives provide an additional boost. We should not expect a smooth ride, however, something that is also reflected by the current cyclical rotation. There has been little sign of fundamental improvement so far, which suggests this rotation is based more on hope than reality. As the valuation gap closes, we should expect some further volatility.

Meanwhile, economies are starting to reopen and stimulus plans continue to be developed across the globe. However, we are still some way from a return to normality and it will be vital to gain an understanding of how businesses are likely to fare as lockdown restrictions are gradually lifted. We also require further detail on the expected stimulus packages, which may benefit certain industries and provide some compelling long-term investment opportunities.

James Rutherford Martin Todd

James Rutherford and Martin Todd, Co-Portfolio Managers

Market and Performance Review

An easing of lockdown restrictions and France and Germany’s proposed European recovery fund, which aims to support countries worst affected by the Coronavirus pandemic, boosted European equities in May, prompting the MSCI Europe ex UK Index to return 4.06%. The Fund outperformed the benchmark index over the month. The largest contributions came from stock selection in Health Care, Financials and Utilities and our underweight position in Consumer Staples. These offset detractions from selection in Materials and Energy.

Sartorius, Orsted and Lonza Group were the largest individual contributors. Sartorius continued to outperform following solid results in April that highlighted huge order intake in its Bio Processing Solutions business. Orsted reported better than expected earnings at the end of April, driven by offshore wind. In addition, the Utilities sector posted strong gains in May. Lonza Group gained after announcing a global collaboration with Moderna to manufacture its proposed Coronavirus vaccine.

Grifols, Lundin Energy and Barrick Gold detracted the most. Grifols fell on concerns over long-term competitive threats to its Alpha-1 antitrypsin deficiency treatment. Lundin Energy fell after Equinor divested its minority stake with the shares priced at a discount. Barrick Gold reported earnings that were in line with expected. However, the share price fell following a period of strong performance.

Outlook

Despite the strong market rally since the end of March, there are reasons to believe that markets are well supported. European equities still remain substantially lower than they were at the start of the year, while low interest rates and a lack of attractive alternatives provide an additional boost. We should not expect a smooth ride, however, something that is also reflected by the current cyclical rotation. There has been little sign of fundamental improvement so far, which suggests this rotation is based more on hope than reality. As the valuation gap closes, we should expect some further volatility.

Meanwhile, economies are starting to re-open and stimulus plans continue to be developed across the globe. However, we are still some way from a return to normality and it will be vital to gain an understanding of how businesses are likely to fare as lockdown restrictions are gradually lifted. We also require further detail on the expected stimulus packages, which may benefit certain industries and provide some compelling long-term investment opportunities.

Gary Greenberg & Kunjal Gala, Co-Portfolio Managers

Market and Performance Review

The benchmark MSCI Emerging Markets Index rose 0.77% in May. Emerging Markets maintained momentum in May but a large increase in coronavirus cases in India and Brazil put pressure on their economies and restricted gains in Emerging Market equities. The number of reported cases in some parts of Asia has been trending down and economies are reopening, particularly in China and South Korea. The Caixin China service PMI jumped to 55 last month from 44.4 in April. Services activity grew at the fastest month-on-month pace since October 2010 as domestic demand rebounded with the easing of the Covid-19 epidemic in the country. China held its delayed NPC meeting towards the end of the month, dropping its annual growth target and telegraphing a new HK security law, a significant catalyst for US/China hostilities. Hong Kong equities underperformed (down 6.8% in May) due to the rise in political tensions and uncertainties from domestic politics. Central banks, such as Brazil, India and Turkey, cut their policy rates to support growth. Many of these Emerging Market countries are still facing a high number of infections, but their economies cannot afford a prolonged shutdown.

The Fund underperformed the benchmark index over the month. The Fund’s overweight China detracted the most from relative returns as the currency depreciated. Stock selection contributed, notably stocks in China, India and Taiwan eclipsing weaker selection in Russia and Brazil.

NC Soft, a Korean online gaming company, rose given stable revenue trends of existing hit titles, including LM (Lineage M) and L2M (Lineage 2M) and rising expectation for the release of Blade & Soul 2. Techtronic Industries, a Hong-Kong listed manufacturer of cordless power tools, rose as the business benefitted from positive momentum in DIY and strong traction in e-commerce sales. Accton Technology, a Taiwanese manufacturer of high-speed 100G and 400G switch solutions, rose after Q1 results beat expectations and management maintained Q2 2020 guidance. Accton is in line to benefit from China’s 5G infrastructure buildout, its Chinese client’s supply chain localisation efforts and ramping 400G switch shipment.

AIA underperformed as investors worry that the insurers’ Hong Kong offshore sales will be negatively impacted by US-China geopolitical tension surrounding the HK national security law, rising social unrest, as well as the US announcement on eliminating special treatment to HK. Baozun, a leading Chinese e-commerce services provider for global brands, was weak amid fears Chinese companies will be forced to delist from US markets. Nari Technology, a mainland China smart grid equipment supplier, underperformed on no stock specific news. Management is confident of beating 10% revenue growth guidance for 2020, considering the grid automation benefiting from the State Grid's new infrastructure-related investment.

Outlook

The corporate landscape that evolves after the COVID-19 pandemic will be different to what came before. Amid the economic damage, there will be innovation and progress, and many businesses will become stronger as a result. The team believes that the Emerging Market structural-growth story remains intact, driven by an aspiring, growing middle class, rising digitisation, reforms and infrastructure development. As industries consolidate, companies with strong balance sheets and capabilities will benefit from these structural drivers. Overall, the team view the current environment not as a threat, but as an opportunity to increase our exposure to excellent, quality companies that are now available at discounted prices.

Gary Greenberg & Kunjal Gala, Co-Portfolio Managers

Market and Performance Review

The benchmark MSCI Emerging Markets SMID (net TR) Index rose 2.75% in May. The number of reported Covid-19 cases in some parts of Asia has been trending down and economies are reopening, particularly in China and South Korea. The Caixin China service PMI, jumped to 55 last month from 44.4 in April. Services activity grew at the fastest month-on-month pace since October 2010 as domestic demand rebounded with the easing of the Covid-19 epidemic in the country. China held its delayed NPC meeting towards the end of the month, dropping its annual growth target and telegraphing a new HK security law, a significant catalyst for US/China hostilities. Hong Kong equities underperformed (down 6.8% in May) due to the rise in political tensions and uncertainties from domestic politics. Central banks, such as Brazil, India and Turkey, cut their policy rates to support growth. Many of these Emerging Market countries are still facing a high number of infections, but their economies cannot afford a prolonged shutdown.

The Fund outperformed the benchmark index over the month. Stock selection contributed the most to relative returns, notably stocks in Korea, China, Egypt and India eclipsing weaker selection in Russia and Brazil. The fund overweight China detracted the most from relative returns as the currency depreciated.

NC Soft, a Korean online gaming company, rose given stable revenue trends of existing hit titles, including LM (Lineage M) and L2M (Lineage 2M) and rising expectation for the release of Blade & Soul 2. Shares in Weimob, a leading provider of cloud-based commerce and marketing solutions operating on Tencent’s social networking service platforms for SMEs in China, rose sharply on 70-80% growth rates in the months of April and May for its Software as a Service (SaaS) business, recovering from a soft first quarter. Techtronic Industries, a Hong-Kong listed manufacturer of cordless power tools, rose as the business benefitted from positive momentum in DIY and strong traction in ecommerce sales.

Baozun, a leading Chinese e-commerce services provider for global brands, was weak amid fears Chinese companies will be forced to delist from US markets. Nari Technology, a mainland China smart grid equipment supplier, underperformed on no stock specific news. Management is confident of beating 10% revenue growth guidance for 2020, considering the grid automation benefiting from the State Grid's new infrastructure-related investment. China Communication Services, a new generation smart services provider, gave back some of the 27% gain since the March bottom due to concerns revenue may decline in the first half of 2020 on delayed project deliveries. We expect the pace of growth to recover in the second half of 2020 as virus containment disruptions ease.

Outlook

Emerging Markets have rallied strongly from the March bottom initially driven by unprecedented monetary/fiscal stimulus and subsequently from a gradual relaxation of lockdowns as markets anticipate an economic recovery in the second half of 2020. The broadening out of the recovery has extended investor interest to more value sectors, sensitive to the economic recovery and trading at low valuations (at one-point trading close to GFC levels). Market sentiment has improved, and the focus has shifted to a sharp rebound in economic activity.

However, investors must weigh the possibility of further economic damage if there is a second wave and economies move towards lockdown again. Also, the timing and efficacy of vaccines under development is far from clear, the business/consumer sentiment remains low and tensions between the US and China are rising over Huawei and Hong Kong. Crucially, we believe that the world is likely to remain in a slow growth environment after the initial rebound. Hence, the Federated Hermes Global Emerging Market Fund remains focused on Growth/Quality and marginally adding to cyclicality where we feel that there is enough margin of safety and the company benefits from medium/longterm catalysts.

Geir Lode, Portfolio Manager

Market and Performance Review

Against a largely negative backdrop, Global Equity markets continued to rally in May as the MSCI World Index returned 4.83%. Cyclicals led the way, although Financials and Energy remained among the laggards, alongside traditional defensive sectors such as Real Estate and Consumer Staples. Echoing the market environment for much of the year so far, the Alpha Model showed a preference for Growth, Sentiment and Profitability, while Valuation continued to be avoided.

Over the month, the Fund underperformed the benchmark index. From a sector viewpoint, the contributions from selection in Consumer Discretionary and Real Estate were more than offset by detractions from selection in Financials, Industrials and Materials. From a regional perspective, selection was successful in Europe, but outweighed by the detraction from selection in North America.

Lululemon, West Pharmaceutical and Lonza Group were the largest individual contributors. Lululemon increased after it started to reopen stores. It has also seen very strong online sales growth as demand for athleisurewear increased as people worked from home. West Pharmaceutical has benefited from the growing trend in the pharmaceutical industry to outsource manufacturing, resulting in strong growth that led to its inclusion in the S&P500 in May. Lonza Group increased after announcing a global collaboration with Moderna to manufacture its proposed coronavirus vaccine.

AIA Group, Barrick Gold and Prudential detracted the most. AIA Group fell alongside the Hong Kong market after protests returned to Hong Kong over China’s plans to implement a national security law. Barrick Gold reported earnings that were in line with expected. However, the share price fell as investors rotated away from traditional safe-haven assets, such as gold. Prudential, which has exposure to Hong Kong, also fell amid the turmoil.

Outlook

Civil unrest in the US, following the tragic death of George Floyd, has pushed the COVID-19 pandemic off the front pages. Meanwhile, China has paused imports of US agricultural goods after President Trump criticised new legislation that undermines the “one country, two systems” arrangement that has kept Hong Kong autonomous. News such as this would normally cause a sharp “risk-off” swing in sentiment, but Equity markets, seemingly immune from bad news, have continued to rally.

The main reasons for this are the excess liquidity in the market and a lack of attractive alternatives, given the historically low interest rates. Meanwhile, economies are starting to reopen, despite the number of coronavirus cases still growing, and investors are starting to see a path out of this particular crisis. However, markets appear to be priced for perfection, suggesting that many still expect a V-shaped recovery.

The reality is likely to be different, which could lead to more volatility and short-term sentiment swings. Currently, focus has turned towards the more cyclical value areas of the market, following a period of substantial underperformance. However, it is still early days, and whether there will be a sustained value rally remains uncertain. We maintain that the optimal approach in this environment remains diversification. It gives exposure to all corners of the market and helps protect portfolios in times of uncertainty.

Lewis Grant, Portfolio Manager

Market and Performance Review

Against a largely negative backdrop, Global Equity markets continued to rally in May as the MSCI ACWI returned 4.35%. Cyclicals led the way, although Financials and Energy remained among the laggards, alongside traditional defensive sectors such as Real Estate and Consumer Staples. Echoing the market environment for much of the year so far, the Alpha Model showed a preference for Growth, Sentiment and Profitability, while Valuation continued to be avoided.

Over the month, the Fund underperformed the benchmark index. The midday pricing of the Fund had a significant impact on performance. From a sector viewpoint, the largest contribution came from selection in Consumer Discretionary, but offset by detractions from Communication Services and Information Technology. From a regional perspective, selection was successful in Europe and Latin America, but offset by the detraction from North America.

Lululemon, Giant Manufacturing and Lonza Group were the largest individual contributors. Lululemon increased after it started to reopen stores. It has also seen very strong online sales growth as demand for athleisurewear increased as people worked from home. Giant Manufacturing has seen relatively stronger demand for entry level or lowend commuting traditional bikes, especially in the US. Lonza Group increased after announcing a global collaboration with Moderna to manufacture its proposed coronavirus vaccine.

AIA Group, Prudential and China Mobile detracted the most. AIA Group fell alongside the Hong Kong market after protests returned to Hong Kong over China’s plans to implement a national security law. Prudential, which has exposure to Hong Kong, also fell amid the turmoil. China Mobile’s parent company announced a collaboration with China Broadcasting Company to build a 5G network. While this is expected to be positive over the longterm, the share price faltered.

Outlook

Civil unrest in the US, following the tragic death of George Floyd, has pushed the COVID-19 pandemic off the front pages. Meanwhile, China has paused imports of US agricultural goods after President Trump criticised new legislation that undermines the “one country, two systems” arrangement that has kept Hong Kong autonomous. News such as this would normally cause a sharp “risk-off” swing in sentiment, but Equity markets, seemingly immune from bad news, have continued to rally.

The main reasons for this are the excess liquidity in the market and a lack of attractive alternatives, given the historically low interest rates. Meanwhile, economies are starting to reopen, despite the number of coronavirus cases still growing, and investors are starting to see a path out of this particular crisis. However, markets appear to be priced for perfection, suggesting that many still expect a V-shaped recovery.

The reality is likely to be different, which could lead to more volatility and short-term sentiment swings. Currently, focus has turned towards the more cyclical value areas of the market, following a period of substantial underperformance. However, it is still early days, and whether there will be a sustained value rally remains uncertain. We maintain that the optimal approach in this environment remains diversification. It gives exposure to all corners of the market and helps protect portfolios in times of uncertainty.

Hamish Galpin, Portfolio Manager

Market and Performance review

The Fund underperformed the benchmark index return of 7.08%. Stock selection was the cause of the negative relative returns in the period. Underperformance was concentrated in Industrials, Information Technology and the US.

Open House was the largest contributor to relative performance; their shares staged a significant recovery in May following the release of strong first half numbers showing that they escaped any major impact from Covid-19 until the last two weeks of March. Australian gold exploration company Evolution Mining’s share price rose following a positive market update where they also noted limited impact from Covid-19. The company should benefit from increased gold prices. Steris announced fourth quarter results in May which were slightly ahead of expectations and received regulatory approval for a second on-site decontamination solution for respiratory masks.

Reinsurance Group of America was the largest detractor. After strong performance in April, the company’s shares fell following the announcement of their first quarter earnings which were below expectations having been negatively impacted by Covid-19 related claims. Community Bank System having shown relative resilience in previous months, failed to rally with the market in May. CAE also detracted from relative performance. The company’s shares remained weak with concerns over Covid-19 related weakness in the aviation sector, where the majority of their training solutions are focused. The company also released fourth quarter earnings in the period which were slightly weaker than expectations.

Outlook

We will continue to keep close watch on stocks in the Fund that have a higher risk profile in the current economic environment. It is clear, though, that large parts of the market have been sold down heavily on fears of the impact of COVID-19. Even with a recent recovery, this should generate some attractive buying opportunities into well positioned businesses for investors such as ourselves with long-term horizons. Furthermore, a return, finally, to more normal levels of volatility once the current situation has settled down is very favourable to active managers and their prospects for beating their benchmarks. Smaller companies’ indices are largely below their long-term trends, which is not necessarily the case for Large Caps, which bodes well for the asset class.

Martin Todd and Mark Sherlock

Martin Todd and Mark Sherlock, Co-Portfolio Managers

Market and Performance review

Global equities rose in May with continued optimism that economies could restart as lockdown restrictions are eased.

The Fund outperformed the benchmark index in the period. Stock selection was the key driver of outperformance with particular success in the Health Care sector.

On an individual stock basis Sartorius was the largest contributor; the company’s trading has been resilient, and their expertise is expected to be utilised in the production of COVID-19 vaccines. Holdings in Abcam and Orsted were also supportive to relative performance, both shares surged in May with the market repricing stocks with secular growth opportunities.

Plasma biotech company CSL was the largest detractor from relative performance. Having outperformed year to date the stock fell on limited news flow, with some concerns around a fall in plasma collection due of COVID. Xylem and Horiba shares fell in the month following announced first quarter results which were slightly weaker than expectations. Both companies have areas which proved more resilient but also exposure to end markets which were impacted by COVID.

Outlook

Despite the recent rally in markets, we expect volatility to persist as the real economic impact of the COVID crisis begins to show in earnings. Nevertheless, we remain confident of the long-term outlook for our strategy; impactful companies are essential to help service the unmet needs of the environment and society and are therefore exposed to enduring sources of demand. COVID has resulted in a paradigm shift for responsible strategies in general as it has put focus on the critical need to build resilience in healthcare, food and water security, and across supply chains. It has also put climate change and worker rights under the spotlight. Impact investing is crucial to the delivery of these goals, with the UN SDG’s providing investors with a roadmap of where the work needs to be done.

One of our investment theses is that we will increasingly see governments transfer funds to the private sector to address these pressing needs, something which has proven true during this crisis. We note that in a situation where entire industries may need government support, companies with a purpose (or positive impact) will more likely get fresh equity from investors or benefit from fiscal spending.

Hamish Galpin, Portfolio Manager

Market and Performance review

The MSCI All Country World SMID Cap Index benchmark returned 6.56% in May. The Fund underperformed the benchmark index return in the month. Stock selection was the cause of negative relative returns in the period. Underperformance was concentrated in Information Technology and Financials.

Fortune Brands Home and Security was the largest contributor to relative performance in the month. The company’s shares caught up with the market rebound following the announcement of strong first quarter numbers and subsequent improved broker ratings. Better-than-expected home sales numbers also helped the stock. Open House’s shares staged a significant recovery in May following the release of strong first half numbers showing that they escaped any major impact from Covid-19 until the last two weeks of March. Steris announced fourth quarter results which were slightly ahead of expectations and received regulatory approval for a second on-site decontamination solution for respiratory masks.

Reinsurance Group of America was the largest detractor. After strong performance in April, the company’s shares fell following the announcement of their first quarter earnings which were below expectations having been negatively impacted by Covid-19 related claims. AMN Healthcare shares failed to recover with the market in May, due to continued concerns that demand for Nurses and health care services are lower whilst less non-COVID activity takes place in hospitals. Our holding in Shenzhen International also detracted from relative performance. With a large portion of the company’s revenues coming from management of toll roads, the company suffered from weaker sentiment following the Chinese government’s decision to waive tolls during the crisis.

Outlook

We will continue to keep close watch on stocks in the Fund that have a higher risk profile in the current economic environment. It is clear, though, that large parts of the market have been sold down heavily on fears of the impact of COVID-19. Even with a recent recovery, this should still generate some attractive buying opportunities into well positioned businesses for investors such as ourselves with long-term horizons. Furthermore, a return, finally, to more normal levels of volatility once the current situation has settled down is very favourable to active managers and their prospects for beating their benchmarks. Smaller companies’ indices are largely below their long-term trends, which is not necessarily the case for Large Caps, which bodes well for the asset class.

Mark Sherlock, Portfolio Manager

Market and Performance Review

Equity markets continued to rally from their March lows as optimism over a global recovery improved and the focus shifted towards the relaxation of lockdown measures. Investors were also encouraged with the additional stimulus and reaction from the US Federal Reserve increasing its balance sheet purchases. Sentiment, further bolstered by hopes of a successful vaccine, shrugged off record unemployment figures. The oil price recovery, combined with enhanced risk appetites, led to continued momentum and growth outperformance, in particular, the technology beneficiaries of the lockdown.

The Fund underperformed the benchmark index over the month. Underperformance was driven by stock selection in the Technology and Health Care sectors. Our underweight to Consumer Discretionary detracted, offsetting returns from the Materials & Processing sector.

Fortune Brands Home & Security (home and security products) rose with improving sentiment related to a recovery in purchased mortgage volumes. Abiomed (miniature heart pumps) rose after a better-than-anticipated impact from Covid-19 and after announcing a small ancillary acquisition broadening its existing product application. Brunswick (recreational marine products) rose on news of the reopening of marinas and expectation of rising participation in outdoor activities like boating in a post Covid-19 world.

Reinsurance Group of America (Life reinsurance) fell due to concern over mortality exposure and reduced earnings power in a lower rate environment. ICU Medical, a provider of infusion therapy (IV) equipment and supplies, moved lower in May after a strong performance year-to-date and as investors took profits following quarterly results that were in line with expectations. Having outperformed in April, Silicon Laboratories (semiconductors) retrenched in May with the resumption of US-China trade rhetoric.

Outlook

The challenge for the US government is to balance the risks of a second wave, as the lockdown is reversed, with the negative financial impact. The measures taken, most notably the substantial stimulus package which could rise to be in excess of $4tn, are targeting the areas of the economy which are most affected by this sharp downturn; consumers and small businesses. This has also mitigated stress in the credit markets to some extent. We believe the Fund is well positioned for both a rotation into cyclicals and continued outperformance of higher quality growth companies.

Note: the equities commentaries above are as of 31 May 2020. For coronavirus-related updates, please visit our dedicated webpage.

The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other communications, strategies or products.

Past performance is not a reliable indicator of future performance. The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. It should be noted that any investments overseas may be affected by currency exchange rates.

On 26 June 2020, all sub-funds of the Federated Hermes Investment Funds Plc umbrella were renamed to incorporate the new Federated Hermes brand

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