Alma Advent Global Convertible Fund

Market Review and Outlook

In April, global equity markets reversed course and staged a strong rebound from March’s sell-off. In the U.S., markets took the U.S. government reducing hostilities against Iran as a clear catalyst, but the rally has continued strong with corporate earnings proving remarkably resilient in the face of higher energy prices and persistent inflation. A majority of S&P 500 companies comfortably beat estimates with robust earnings growth and constructive guidance. Leadership has come from mega-cap technology stocks as strong quarterly results eased concerns over capital expenditures and demonstrated that artificial intelligence (AI) infrastructure spending could translate into tangible returns. Importantly, the April rally extended well beyond mega-caps, with small- and mid-cap stocks also participating amid strong earnings, improved AI sentiment and a broad rotation into undervalued cyclical sectors. European markets increased, clawing back losses from the previous month as the geopolitically driven relief rally and strong corporate earnings helped propel the STOXX Europe 600. Emerging market equities increased during the month, driven by easing tensions in the Middle East, continued global AI infrastructure demand, strong earnings momentum and attractive valuations drawing inflows. Japanese equities hit record highs, as reduced fears of prolonged oil supply disruptions and a weaker yen helped boost AI and tech-related stocks. Global bond markets increased.

Fund

In April, the fund outperformed the index return. All regions outperformed on a relative basis, with Asia the largest contributor. On a sector basis, Technology and Industrials were the best performing. The Consumer Discretionary and Materials sectors lagged slightly on relative performance.

There was $11.7 billion of global convertible issuance in April and $67.6 billion of issuance year-to-date, more than twice the amount of last year’s record-setting pace. This wave of convertible issuance is expected to continue as refinancing needs, AI-driven capex spending, strong M&A activity and supportive market conditions help maintain issuance momentum.

During the month, we participated in several new issuances across Asian and American companies focused most on the Technology and Healthcare sectors. The fund exited certain positions where appreciation potential was more limited, concentrated in Technology, and in particular software, in favor of other issues in the sector and in the Financials sector.