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Summary

Global equity markets experienced a volatile and unsettled first quarter. January and February saw strong positive returns, but markets weakened through March due to the escalation of the US-Iran conflict.

The Fund delivered a NAV return of 0.0% in the first quarter, behind the FTSE All Share TR return of 2.4%. Relative performance was held back by our underweight position in the energy sector as prices rose following the escalation of the US-Iran conflict. Consumer-facing holdings were impacted by rising inflation concerns and a rapid repricing of interest rate expectations weighed on sentiment. Banks which had performed strongly during 2025 gave back some of their gains in the first quarter as the market worried about future global growth – our positions in Standard Chartered and Intesa Sanpaolo were detrimental. On the positive side, miner Rio Tinto, private equity group 3i Group and utility SSE performed well.

Markets

Global equity markets experienced a volatile and unsettled first quarter. January and February saw strong positive returns, but markets weakened through March due to the escalation of the US-Iran conflict. Disruption to Middle Eastern oil supply routes pushed crude prices above $100 per barrel in March, reigniting concerns over persistent inflation and complicating the outlook for central banks.

Equity markets in the US, Europe and Asia all came under pressure, with investors increasingly focused on the implications of higher energy prices for inflation, growth and monetary policy. Market leadership was concentrated in energy and defence stocks that outperformed amid rising oil prices and increased defence spending expectations, while more cyclical and growth‑oriented sectors lagged.

Once again, the UK equity market performed well compared with international equity markets. The FTSE All-Share index delivered a positive return of 2.4%, benefitting from exposure to energy, defence and other defensive sectors. UK gilt yields rose sharply during March as investors repriced inflation risks and expectations for Bank of England policy. The yield on the 10‑year gilt rose from c.4.5% at the end of 2025 to around 4.9% by quarter‑end, reflecting concerns over higher energy prices, the UK’s reliance on imported fuel and the potential for interest rates to remain higher for longer.

Performance

The Fund delivered a NAV return of 0.0% in the first quarter, behind the FTSE All Share TR return of 2.4%. Relative performance was held back by our underweight position in the energy sector (most notably in Shell) as prices rose following the escalation of the US-Iran conflict. Consumer-facing holdings were impacted by rising inflation concerns and a rapid repricing of interest rate expectations weighed on sentiment. Banks performed strongly during 2025 and gave back some of their gains in the first quarter as the market worried about future global growth. Our positions in Standard Chartered and Intesa Sanpaolo were detrimental while not owning Barclays was beneficial. Elsewhere in financials, the specialist lending company, ICG (formerly Intermediate Capital Group), was a large detractors, with its share price coming under pressure due to concerns about a downturn in the private credit cycle. This reflects a read across from developments in the US on a de-rating of international peer companies. ICG’s underlying business has continued to perform well, with strong fund flows.

Amongst consumer-facing names, housebuilder Taylor Wimpey and luxury goods group Burberry were also detrimental reflecting a weakening in sentiment towards consumer stocks amidst fears of interest rate rises.

Positives included miner Rio Tinto which is positioned to capture a range of long-term drivers, including the energy transition and data infrastructure investment together with our holding in private equity group 3i Group. Utility SSE also performed well reflecting its exposure to infrastructure and essential services, with significant new projects generating attractive returns.

Outlook

Escalating tensions in the Middle East have unsettled markets and introduced a new source of uncertainty with higher energy prices impacting inflation expectations and the potential future level of interest rates. The UK equity market remains in positive territory for the first quarter of 2026, but what happens next will depend on how the conflict in Iran and the broader Middle Eastern region evolves and resolves. There are a wide range of potential outcomes, which are virtually impossible to predict. The ongoing uncertainty is driving heightened volatility in markets.

Against this backdrop, we remain focused on building a carefully constructed portfolio of attractively valued companies, drawing on a wide range of opportunities across the market. The UK market continues to offer attractive valuations, both in absolute terms and relative to many other regions, while also providing a differentiated sector mix and broad exposure to global rather than purely domestic drivers. We therefore believe the UK market continues to offer a selectively compelling combination of valuation support, income and long-term total return potential.

• Capital erosion: Where fees are charged to capital instead of income, or a fixed distribution amount is paid regardless of the Company’s performance, there is the potential that performance or capital value may be eroded.

• Concentration risk: The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the company, both up or down.

• Concentration risk: The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down.

• Counterparty risk: The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole.

• Currency risk: If the Company’s investments are denominated in currencies different to the currency of the Company’s shares, the Company may lose value as a result of movements in foreign exchange rates, otherwise known as currency rates.

• Derivatives risk: Derivatives, which are financial instruments deriving their value from an underlying asset, may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the Company.

• Gearing risk​: The Company may borrow money to make further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase by more than the cost of borrowing, or reduce returns if they fail to do so. In falling markets, the whole of the value in such investments could be lost, which would result in losses to the Company.

• Liquidity Risk: The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. In difficult market conditions, investors may not be able to find a buyer for their shares or may not get back the amount that they originally invested. Certain investments of the Company, in particular the unquoted investments, may be less liquid and more difficult to value. In difficult market conditions, the Company may not be able to sell an investment for full value or at all and this could affect performance of the Company.

• Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.

• Market Risk: The value of investments can go up and down and an investor may not get back the amount initially invested.

• Operational risk​: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the Company.

• Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.

• Private market valuations, and pricing frequency: Valuation of private asset investments is performed less frequently than listed securities and may be performed less frequently than the valuation of the Company itself. In addition, in times of stress it may be difficult to find appropriate prices for these investments and they may be valued on the basis of proxies or estimates. These factors mean that there may be significant changes in the net asset value of the Company which may also affect the price of shares in the Company.

• Share price risk: The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. This means the price may be volatile, meaning the price may go up and down to a greater extent in response to changes in demand.