Alma Advent Global Convertible Fund

Market Review and Outlook

Global equity markets continued to advance in May. In the US, optimism surrounding diplomatic efforts between the US and Iran to reduce tensions in the Middle East helped ease geopolitical concerns while resilient corporate earnings largely offset headwinds from elevated energy prices and persistent inflation. Companies tied to the Artificial Intelligence (AI) ecosystem remained market leaders, driven by accelerating capital investment and expanding enterprise adoption. Strong activity is not limited to AI as US payroll gains and job openings have been accelerating across the American economy. Importantly, market participation continued to broaden beyond mega-cap technology, with gains extending into small and mid-cap companies supported by attractive valuations and improving growth prospects. European markets advanced in May, lifted by diplomatic progress in US-Iran talks, solid first-quarter earnings, and an enduring appetite for AI-related technology with the STOXX Europe 600 returning +3.16%. Emerging market equities extended their rally, led by AI and semiconductor momentum in Taiwan and South Korea, resilient earnings growth and easing concerns over Middle East tensions. Japanese stocks were among the month’s standout performers, as AI and semiconductor names surged, geopolitical anxieties softened, foreign inflows held firm, and corporate governance reforms continued to bolster investor confidence. Global bond markets increased during the month, as spread gains more than offset rises in risk-free rates. Global convertibles, represented by the FTSE Global Focus Convertible Index, returned +5.29% during the month (USD-Hedged).

Fund

In May, the fund outperformed the index return, led by strong performance from AI-related holdings. All regions outperformed on a relative basis, with Asia the largest contributor, benefiting from Technology investments in the region. On a sector basis, Technology and Consumer Discretionary were the best performing. The Media and Financial sectors lagged slightly on relative performance.

There was $29.0 billion of global convertible issuance in May and $96.6 billion of issuance year-to-date, a pace that would set a new historical annual high. 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 mostly Asian and American companies focused mostly in the Technology and Healthcare sectors. We exited certain positions where appreciation potential was more limited, with a concentration in Consumer Discretionary and the European region.