Alma Advent Global Convertible Fund

Market Review and Outlook

Global equities declined modestly in October. In the US, investors rotated from large-cap growth and technology stocks toward value and defensive sectors. The economic backdrop was generally constructive, with resilient growth, steady consumer demand, and positive third-quarter earnings. However, geopolitical tensions and higher energy prices clouded the inflation outlook, raising concerns that monetary policy could remain restrictive for longer. Technology stocks with elevated valuations and heavy capital needs for artificial intelligence (AI) infrastructure came under scrutiny, as questions over the pace of AI spending, earnings visibility and returns weighed on the sector. European markets advanced, supported by strength in healthcare and energy, defensive rotation, and resilient earnings. Emerging market equities fell, as weakness in AI-related technology and semiconductor stocks (particularly in South Korea and Taiwan), a stronger US dollar, and country-specific political uncertainty weighed on performance. Japanese equities declined as concerns over the sustainability of AI-related investment weighed on semiconductor and technology stocks. Global bond markets were mixed. Global convertibles declined -3.52%, as weakness in AI-linked technology and semiconductor stocks, particularly in emerging Asian markets, weighed on underlying equities.

Fund

In October, the portfolios lagged the index return. All regions lagged on a relative basis as global markets declined. Sector performance was mixed, with Telecommunications and Consumer Discretionary as relative outperformers. The Technology and Utilities sectors lagged relative to the index due to allocation. Recent selloffs in the Technology sector weighed on performance; we have managed risk by reducing the overweight in recent weeks and are positioned in companies with strong balance sheets and attractive growth prospects that offer a positively asymmetric risk/reward profile.

Global convertible issuance totaled $20.1 billion in October, bringing year-to-date volume to $224 billion, already surpassing the full-year total from 2025 and putting the market on pace for a new annual record. This momentum is expected to continue, driven by upcoming refinancing needs, AI-related capex spending, elevated M&A activity, and supportive market conditions.

During the month, we participated in several new issuances, including Meta Platforms and United Microelectronics. We swapped into a newer issue from NextEra Energy. We exited certain positions with more limited appreciation potential, with the largest concentration of sales in Asia.