Global Capital Aware Fund Update – July

The Insync Global Capital Aware Fund returned -0.89% over the month and added 10.56% for the last 12
months to July 2025. Currently, the Fund’s protection level is approximately 25% of its notional equity
exposure.
Tencent was the largest contributor to Fund performance in July, driven by strong momentum in its leading gaming franchises, renewed confidence in its diversified and resilient business model, and improving sentiment toward the broader Chinese equity market. At the time of writing, the company also reported robust second-quarter earnings, with solid growth in both gaming and advertising, supported by the effective integration of AI across its core business segments.

By contrast, our underweight position in Nvidia was the largest detractor in July. The recent market rally was led by a surge in enthusiasm for the AI theme, with Nvidia at the centre of investor attention as a key supplier of GPUs powering the rapid build-out of AI infrastructure. This concentration of market leadership made Nvidia a significant driver of index performance during the month, amplifying the impact of our underweight position.

While the Fund generated a healthy double-digit return in another volatile year, the recent relative
performance gap versus the benchmark warrants context.

Since 2009, our philosophy has remained unchanged: own outstanding businesses with durable advantages at reasonable prices and allow compounding to do the work. At the heart of this process is a disciplined focus on company fundamentals and their ability to benefit from long-term structural shifts.

For much of the year, this approach delivered strong results. The Fund outperformed the benchmark by
nearly 3% over the first nine months, driven by strong contributions from holdings such as: Fortinet
(Cybersecurity, +82.5%), Nintendo (Gaming, +53.7%), and Tencent (Interactive Entertainment, +22.5%)*.

The environment shifted dramatically after April’s sell-off. While we do not base investment decisions on
macro forecasts, we remain macro-aware, recognising that geopolitical or policy shocks can materially affect company fundamentals. We expected further volatility would create opportunities to add to high-quality businesses at attractive valuations, but the window proved remarkably short-lived. Instead, the S&P 500 staged one of the most explosive rallies in history – advancing nearly 25% in just 55 days, the fastest rebound to a new high following a 15% drawdown on record. Importantly, this rally was extremely narrow, led almost entirely by AI-linked semiconductor stocks and a handful of U.S. mega-cap technology companies. Our underweight to this narrow group, particularly Nvidia, was the main source of relative performance difference this year. While we recognise Nvidia’s recent success, we see rising risks from intensifying competition (e.g., DeepSeek), and an elevated valuation that leaves little margin of safety.