highlights

Lusate Inc. – High Yield 2022 primary objective is to build a buy and maintain portfolio set up for a period ending in late 2022. It mainly invests in high yield corporate bonds denominated in EUR, USD, GBP and/or CHF. The Investment Manager aims to identify opportunities in the market through a judgemental approach utilizing fundamental analysis of economies, markets, sectors and issuers. The selection of securities is based on a three-step process (sectors, issuers, and issues), combining top-down (credit market evaluation) and bottom-up (specific issuer risk) approaches. The portfolio initially built at launch will remain quite the same until the maturity of the sub-fund in 2022 (buy-and-maintain strategy). Financial derivative instruments are used for the purpose of the investment strategy as well as systematic currency-hedging (non-EUR exposure hedged back to EUR at the portfolio level).

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Golden Age is an actively managed long-only global equity strategy launched in November 2009. It invests in companies deriving a significant portion of their revenues from the ageing population theme. It has a bias towards developed markets and towards the Healthcare, Consumer and Financial sectors. It seeks to outperform the MSCI World TR ND index over the long-term. The investment approach combines a fundamental bottom-up approach with a top down overlay to create a high conviction portfolio of around 40-60 positions. It focuses on names which should outperform the broader market on a sustainable basis and invests only in cash-flow positive companies that avoid significant binary risk.

The portfolio contains companies that, taken together, provide growth, quality, stability and predictability. It seeks to invest in high quality companies with sustainable financial models, business practices and business models showing resilience and the ability to evolve and benefit from long term structural trends using LOIM proprietary ESG and Sustainability Profiling tools and methodologies.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Golden Age is an actively managed long-only global equity strategy launched in November 2009. It invests in companies deriving a significant portion of their revenues from the ageing population theme. It has a bias towards developed markets and towards the Healthcare, Consumer and Financial sectors. It seeks to outperform the MSCI World TR ND index over the long-term. The investment approach combines a fundamental bottom-up approach with a top down overlay to create a high conviction portfolio of around 40-60 positions. It focuses on names which should outperform the broader market on a sustainable basis and invests only in cash-flow positive companies that avoid significant binary risk.

The portfolio contains companies that, taken together, provide growth, quality, stability and predictability. It seeks to invest in high quality companies with sustainable financial models, business practices and business models showing resilience and the ability to evolve and benefit from long term structural trends using LOIM proprietary ESG and Sustainability Profiling tools and methodologies.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Golden Age is an actively managed long-only global equity strategy launched in November 2009. It invests in companies deriving a significant portion of their revenues from the ageing population theme. It has a bias towards developed markets and towards the Healthcare, Consumer and Financial sectors. It seeks to outperform the MSCI World TR ND index over the long-term. The investment approach combines a fundamental bottom-up approach with a top down overlay to create a high conviction portfolio of around 40-60 positions. It focuses on names which should outperform the broader market on a sustainable basis and invests only in cash-flow positive companies that avoid significant binary risk.

The portfolio contains companies that, taken together, provide growth, quality, stability and predictability. It seeks to invest in high quality companies with sustainable financial models, business practices and business models showing resilience and the ability to evolve and benefit from long term structural trends using LOIM proprietary ESG and Sustainability Profiling tools and methodologies.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Global Inflation-Linked Fundamental is a long only global sovereign bond fund launched in January 2019.

The Fund is actively managed. The Bloomberg Barclays World Govt Inflation All Maturities TR is used for performance and internal risk indicators comparison.

The Fund invests mainly in government inflation-linked bonds issued by OECD countries applying a best-in-class approach to Sustainable investing. It seeks to achieve higher risk-adjusted returns to widely used market-cap indices over the long term. The investment approach is two-fold: a disciplined analysis which differs from a traditional market-cap approach by allocating to countries based on macroeconomic indicators including extra financial data (i.e. ESG) ; and a fundamental sovereign analysis aiming to further mitigate countries’ default and investability risks as well as identify potential opportunities taking into account financial and extra-financial information. Risk management is performed by fund managers at a portfolio level, alongside independent teams who oversee investment risks and operational risks.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Global Inflation-Linked Fundamental is a long only global sovereign bond fund launched in January 2019.

The Fund is actively managed. The Bloomberg Barclays World Govt Inflation All Maturities TR is used for performance and internal risk indicators comparison.

The Fund invests mainly in government inflation-linked bonds issued by OECD countries applying a best-in-class approach to Sustainable investing. It seeks to achieve higher risk-adjusted returns to widely used market-cap indices over the long term. The investment approach is two-fold: a disciplined analysis which differs from a traditional market-cap approach by allocating to countries based on macroeconomic indicators including extra financial data (i.e. ESG) ; and a fundamental sovereign analysis aiming to further mitigate countries’ default and investability risks as well as identify potential opportunities taking into account financial and extra-financial information. Risk management is performed by fund managers at a portfolio level, alongside independent teams who oversee investment risks and operational risks.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Global Government Fundamental is a long only global sovereign bond fund launched in December 2010.

The Fund is actively managed. The Bloomberg Barclays Global Treasury is used for performance and internal risk indicators comparison.

The Fund invests mainly in OECD sovereign bonds applying a best-in-class approach to Sustainable investing. It seeks to achieve higher risk-adjusted returns to widely used market-cap indices over the long term. The investment approach is two-fold: a disciplined analysis which differs from a traditional market-cap approach by allocating to countries based on macroeconomic indicators including extra financial data (i.e. ESG and carbon intensity) ; and a fundamental sovereign analysis aiming to further mitigate countries’ default and investability risks as well as identify potential opportunities taking into account financial and extra-financial information. Risk management is performed by fund managers at a portfolio level, alongside independent teams who oversee investment risks and operational risks.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with

\112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

Lusate Inc. – Global Government Fundamental is a long only global sovereign bond fund launched in December 2010.

The Fund is actively managed. The Bloomberg Barclays Global Treasury is used for performance and internal risk indicators comparison.

The Fund invests mainly in OECD sovereign bonds applying a best-in-class approach to Sustainable investing. It seeks to achieve higher risk-adjusted returns to widely used market-cap indices over the long term. The investment approach is two-fold: a disciplined analysis which differs from a traditional market-cap approach by allocating to countries based on macroeconomic indicators including extra financial data (i.e. ESG and carbon intensity) ; and a fundamental sovereign analysis aiming to further mitigate countries’ default and investability risks as well as identify potential opportunities taking into account financial and extra-financial information. Risk management is performed by fund managers at a portfolio level, alongside independent teams who oversee investment risks and operational risks.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

LOF – Global FinTech is actively managed in reference to the MSCI ACWI Index. It invests in equity securities issued by companies worldwide (including Emerging Markets) that are active in the research, development, production, promotion and/or distribution of digital financial services and/or technologies. It may invest across all economic sectors (including, but not limited to, companies that support the supply chain of, and provide services for, these companies). It seeks to invest in high quality companies with sustainable financial models, business practices and business models showing resilience and the ability to evolve and benefit from long term structural trends using LOIM proprietary ESG and Sustainability Profiling tools and methodologies. The investment approach is based on fundamental research. As part of its Emerging Market exposure, the Sub-Fund may invest up to 20% of its net assets in shares issued by mainland China-incorporated companies (including China A-Shares). The Investment Manager is authorized to use financial derivative instruments for hedging purposes or for EPM but not as part of the investment strategy.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.

highlights

LOF – Global FinTech is actively managed in reference to the MSCI ACWI Index. It invests in equity securities issued by companies worldwide (including Emerging Markets) that are active in the research, development, production, promotion and/or distribution of digital financial services and/or technologies. It may invest across all economic sectors (including, but not limited to, companies that support the supply chain of, and provide services for, these companies). It seeks to invest in high quality companies with sustainable financial models, business practices and business models showing resilience and the ability to evolve and benefit from long term structural trends using LOIM proprietary ESG and Sustainability Profiling tools and methodologies. The investment approach is based on fundamental research. As part of its Emerging Market exposure, the Sub-Fund may invest up to 20% of its net assets in shares issued by mainland China-incorporated companies (including China A-Shares). The Investment Manager is authorized to use financial derivative instruments for hedging purposes or for EPM but not as part of the investment strategy.

PERFORMANCE COMMENT

In April, Lusate Inc.–China High Conviction P share class in USD increased 2.0% compared to its benchmark (MSCI China All Shares Index) which rose 2.3%, underperforming by 34 bps over the month. However, for the first four months of this year, the Fund was up 3.7% compared to the benchmark’s 0.8%, outperforming by 294 bps. Since inception, the Fund has returned +20.2% compared to the benchmark’s 14.3% over the same period, outperforming by 588 bps.

The Chinese equity market stabilised in April, underperforming most developed market indices (Stoxx 600 +4.8%, S&P +5.3%, all in USD). The major drag continued to be Chinese ADRs, which barely changed in the month, rising just +0.8% as measured by the S&P/BNY Mellon China ADR Index. In terms of sector performance, Healthcare recovered the most with double-digit returns while Real Estate and Utilities recorded losses. Overall, we have seen encouraging first quarter results from A-share listed companies with solid end demand, and the quarterly results of Chinese ADRs and internet companies are scheduled for May, which are the next major data points for investors to watch.

MACRO REVIEW

In April, the Politburo meeting stated that the economic recovery is still uneven. Currently it is still at an early stage of the transition from investment/exports growth drivers to consumption-related drivers. As a result, we expect that the Chinese government will maintain the stability of macro policy, and risk of overtightening is rather low. In addition, as illustrated by the local SOE default late last year, local financial risks can spill over to the broader market and credit risks are increasingly correlated with regional fiscal soundness. We are assured that the government is fully aware of such risks and is more cautious about local SOEs’ bond default and will closely monitor potential significant spillovers of local risks.

That said, we also see several positive bottom-up developments in China. The preliminary Chinese GDP figure for the first quarter of 2021 showed 18.3% growth on a year-on-year basis, due to both the low base effect caused by Covid-19 last year and the strong economic recovery this year. In addition, the per capita disposable income of residents in China for Q1 2021 was RMB 9,730, a nominal increase of 13.7% over the same period of last year. From January to March, the total retail sales of social consumer goods reached RMB 10.5 trillion, a year-on-year increase of 33.9%. All of the underlying macro data have shown that the Chinese economy has been solid and consumer consumption has been strong.

PORTFOLIO ACTIVITY

During April we initiated positions in the solar energy industry as we are bullish on the long-term outlook for solar energy demand globally, and thus we started investing in some local Chinese companies with leading technology and global footprints. Meanwhile, we also increased our investment in the Healthcare sector as we see value starting to emerge after the previous market correction, particularly in private hospitals and online healthcare providers with limited exposure to government reimbursement programmes. In addition, we started building positions in a leading semiconductor foundry company which we believe will maintain its leading node advantage over competitors for the next few years, especially when the overall global supply is tight. Last but not least, we further increased our conviction on a leading Chinese private bank after its solid first quarter result showed encouraging earnings growth.

TOP CONTRIBUTORS/DETRACTORS TO RELATIVE PERFORMANCE

The top performance contributor was Li Ning. Its share price was up 25.5% in the month of April as the company reported above 80% year-on-year retail sales growth for the first quarter of this year, which beat Street expectations. Chinese consumers continued to like its product design and quality, and we are encouraged to see that the brand is particularly popular among young Chinese consumers.

The CATL share price increased 20.5% as the company released a set of solid first quarter results with 112% year-on-year revenue growth and 160% year-on-year net profit growth. Its margin was well protected during a period when raw material costs rallied substantially, which has provided further proof of its strong positioning in the supply chain.

NetEase went up by 10.8% as expectations started to build on its pipeline of games, including famous IP names like Harry Potter, for release in the summer, and Diablo Immortal, being released late this year.

The top performance detractor was Tencent Music which dropped by 15.0% during the month as the alleged block trades continued in April after a family office’s liquidation of its holdings in March. Management’s comments on increasing investment in long-form audio also dampened near-term sentiment.

CCB-A corrected by 8.4% as the market lowered its expectations for net profit growth and there was a style rotation from Value to Growth, a reversal from last month. CCB-A’s Q1 2021 results were solid but unexciting, with net profit up by 2.8%. We have cut our position due to the lack of near-term catalysts.

Ping An-A corrected by 6.1% on lackluster premium sales after its jump-start campaign. We observed weakness for Chinese insurers across the board in April. The stock is trading at record low valuations and we think the risk-reward is attractive although there is a lack of short-term catalysts. We continue to hold the position as a defensive compounder in the near term and expect a turnaround to happen later in the year.