Insights

Speaker(s)

Alistair Wittet

Portfolio Manager, European and Global Strategies

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Fan Ye

Portfolio Manager, Global Strategy

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April 2026

podcast 20:22 minutes

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Q1 26 insights – Podcast European Equity Strategy

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Transcript

Fan Ye:

Hello everyone, this is Fan Ye, portfolio manager of the Aecus Global team.

And here today with me is Alistair Wittet, who is one of the portfolio managers of the Aecus European Equity Strategy. The team manages a very concentrated portfolio of equity quality growth stocks and we’re investing for the long run.

Let’s see what happened in the past quarter.

So, Alistair, for the past quarter, from the fundamental perspective, which companies have done well and which companies have not.

Alistair Wittet:

Yes, so the first quarter of the year is results season, full year results season for the companies in the portfolio. So, we get a full assessment of how 2025 went for them.

And it was a very good results season.

So organic sales growth, this is the most important metric that we monitor was 9% on average in the fourth quarter. Similar level for the full year.

This is ahead of our target of 7%.

And we saw double-digit earnings growth also for the portfolio when we adjust for currency movements.

So, what impressed us the most?

A couple of names maybe, Galderma. The leader in fillers and biostimulators had very strong numbers. They’ve also guided to a strong 2026.

ASML, the seller of advanced lithography machines, continues to benefit from the data centre buildouts with expectations again for a strong double-digit growth in 2026.

And then maybe finally, Campari, the owner of brands like Aperol, Campari itself, but not only, had a very strong finish to the year, relative to the sector. It is a sector that is struggling. Spirit consumption is in decline and yet Campari was able to deliver just under 5% organic sales growth in its fourth quarter.

Fan Ye:

What about companies which are not doing so well?

Alistair Wittet:

So, we had a few disappointments.

Carl Zeiss Meditech, one of the leaders in the ophthalmology space with laser eye surgery machines, intraocular lenses. They’ve had a weak start to the year. They’ve removed their full year guidance already.

Fan Ye:

Well no, investor hate that.

Alistair Wittet:

No, never good.

And they’re also searching for a new CEO. So, we’re in a bit of a difficult time for Zeiss. They continue to have very high-quality products. They continue to be seen as one of, if not the innovation leader in the ophthalmology space, but they’re executing very poorly.

So, we await the arrival of the new CEO and some better execution. And if we don’t see that, we will look to exit that position.

We also had a slightly disappointments, but I think this is more to do with conservative guidance than anything else on the parts of Dassault System and Lindt.

In the case of Lindt, they’ve just come off a number of years of very strong inflation and that inflation is normalizing and we’re waiting to see volumes pick up on the back of that normalization. So, we’re in a bit of a transitory year from that perspective for Lindt.

Fan Ye:

Yes, so for the companies who are doing well, what confidence do you have, believing these companies will continue to do well?

Alistair Wittet:

Yes. So, I mean, we, as you know, look for three important criteria in each of our companies, the defendability of the franchise, the repeatability of the growth, and an opportunity to grow for a long time in what we call scalability.

And so, if we look at some of the top positions, we’re pretty confident. So ASML, our top position, they have good visibility with the data centre build out for the coming years, a very strong backlog. And this is before we talk about the technological transition towards their latest generation of “High NA” machines that we should start to see contributing at the end of the decade and into the start of the next decade.

So, there we really have a defendability, we have a repeatability of the growth and a long opportunity or a scalable opportunity.

Fan Ye:

I heard those machines are really expensive. So, in theory, that should drive much faster revenue growth when the higher machines become adopted.

Alistair Wittet:

Absolutely, Yeah, there’s a big mix shift that should come through as those grow in the mix.

Our healthcare holdings, Straumann and Alcon, our second and third biggest holdings, have a very rich innovation pipeline that they’re rolling out. And we see that driving continued growth this year and, in the years, to come.

Schneider Electric, another top position exposed to the data centre rollout as well, because of the complexity of the electrical needs of these data centres, but it’s not just about data centres, the rest of the business also benefits from a more broader electrification of the economy.

And then our fifth holding Games Workshop, the owners of the Warhammer franchise, we can come back to that later, but we see continued strong growth in the years to come there as well.

Fan Ye:

I see. So, there’s obviously a lot of things going on. There are companies doing well. There are companies which are slightly disappointing.

Could you explain the drivers for the fund’s performance since inception to make it easier for us to understand what is driving the performance?

Alistair Wittet:

Yeah, so I think there are two very different stories that are going on since the inception of the fund.

There’s the fundamental story and then there’s the valuations.

The fundamentals have been very strong. We’ve had three full result seasons since the launch of the fund. Organic sales growth, as I’ve mentioned, is running ahead of our expectations. We’re seeing upgrades as we had hoped. We’re seeing strong fundamental momentum.

Countering that has been a general derating of the valuation of these companies. The portfolio, as a whole, launched at the start of July with a valuation of 25.5 times prospective earnings. And that has come down to a little over 21 times at the end of March. And this derating should be put, I think, in a longer-term context of a derating that’s really happened since the end of 2021 for a lot of these businesses. And that has obviously related to rising interest rates and higher inflation levels.

So where are we in that journey?

Valuations now are back to where they would have been for these companies in 2013.

So, if we track back today’s portfolio and simulate what multiple it would have traded on over the past decade, we’re back to where we were at the start of that period of around 21, 22 times earnings. So, we think a lot of the derating is behind us. It doesn’t mean it can’t go further. But what is important for us is that we’re continuing to see strong growth, strong fundamentals, that should act as a floor to that derating.

Fan Ye:

Yeah, it sounds like for companies like Lindt and Campari, it feels like for sure these businesses definitely can last for more than 20 years. So, in the meantime, if they can grow their earnings, 21 times earnings do not seem to be a very high price in our view, right?

Alistair Wittet:

No, I think it’s even historically at a low.

And in fact, there are sectors where we are really at historical lows. The healthcare sector is at historical lows. Some of these data businesses are trading on multiples that we haven’t seen in decades. So, there are real value opportunities, I think, emerging in this quality and growth space.

Fan Ye:

I see.

So why is the valuation multiples keep on coming down despite many of the top holdings continue to perform really well from the business perspective?

And when should we expect the gap between valuation multiple and the fundamental to close?

Alistair Wittet:

It’s very difficult to say exactly when. I think there are a couple of conditions that need to be met. I think the first is from a fundamental standpoint, these businesses need to continue to deliver on their growth.

It’s worth noting that a lot of these companies benefited from a COVID wave. They were COVID beneficiaries, not just on the valuation, but also on their fundamentals and they had to absorb a hangover period, if you like, from 2022, 2023, 2024, when those strong fundamentals normalized. So, I think that is behind us.

We’re seeing signs that earnings estimates are recovering.

Fan Ye:

-These are the “wiggly worms”?

Alistair Wittet:

The “wiggly worms” that we talk about in the paper, exactly.

And on the other side, we need a stabilization of the interest rates environment. We don’t necessarily need the interest environment to decline; we just need a stabilization there. And I think if we see a stabilization there, we should also see a stabilization in valuation multiples.

Fan Ye:

Okay, let’s focus on a few near-term topics.

What war impact of the Iranian war on portfolio companies and also to the fund’s performance?

Alistair Wittet:

So, the direct impact of the war is very limited, the Middle East as a region account for around 2% of the portfolio sales.

So, it’s relatively immaterial. It’s the indirect impacts that are much more relevant. And the indirect impact on supply chains, on inflation, and on interest rates. And I think that is what is driving, or what has been driving share prices over the month of March.

What is interesting is that traditionally defensive sectors didn’t prove very defensive during the sell-off. So, if we take sectors like the healthcare sector, typically non-cyclical, typically defensive, that sector was down more than the index and indeed was down just as much as banks, which is a bit of an anomaly when we think about historical periods of strong drawdown.

Fan Ye:

But what healthcare has anything to do with the Middle East?

Alistair Wittet:

Very little, very little, but I think the healthcare share prices are reacting to the interest rates, potential interest rate effects of the war and rising interest rates mathematically might have a negative impact on the valuations of these businesses.

Fan Ye:

The portfolio is designed to perform under all weather conditions, but is there any particular weather you think the portfolio will do particularly well?

Alistair Wittet:

So, I think we need to separate in absolute terms and in relative terms. So, in absolute terms, this portfolio should deliver, if we’re right on the fundamentals, in normal economic times. In other words, these businesses continue to roll out their innovation globally, they continue to add new customers.

And in that environment, we should see the earnings growth of the portfolio come through as a return to us as shareholders.

Where we think the portfolio would do particularly well in a relative standpoint is when times are tough. That’s when the strong get going. And so therefore, historically, this portfolio would be expected to outperform in difficult economic times.

Now, it’s worth noting that the valuation premium that these companies, these defensive companies trade on has come down a lot. I mentioned the healthcare sector, but not only.

And I think partly that’s because we haven’t seen a recession in the US at least for 20 years. The last main recession was the financial crisis. COVID was, in that sense, a bit of a flash in the pan.

So, there’s a whole generation of investors who have never seen a recession. And I think we’re seeing that reflected in valuations where these traditionally defensive sectors are no longer trading at the sorts of premium that we would have seen in the past.

Fan Ye:

Yeah, indeed, I think when I now open any long-term chart, the great financial crisis doesn’t even appear at the beginning part of the chart anymore. So, I’m sure many people have forgotten how severe the financial drawdown can be in a financial crisis.

So hopefully, these high-quality defensive businesses will help the portfolio when tough time comes.

So, moving on to AI, we also address this topic in our Global Equity podcast.

So where do you see risks and opportunity given the fast development of AI for the European portfolio.

Alistair Wittet:

Yeah, so I think the first thing to say is that this is a genuinely revolutionary technology.

We do believe that this is huge, similar if not more so than the Internet in the 90s and 2000s. This will change the way businesses operate. So that’s the first point.

We do believe it is an important technology, and therefore, we see and we believe there will be substantial infrastructure buildout.

There may be excesses at some stage, I don’t know, but there will be a substantial infrastructure build out as we build out data centres to harbor this technology.

So, where we see opportunities in Europe is in the sellers of picks and shovels to build those data centres.

So, semiconductor names, I’ve mentioned some of them already, ASML. We also own VAT; we own Seagate in the memory space.

Businesses like Schneider will help with the energy infrastructure associated with these data centres.

Fan Ye:

Very important.

Alistair Wittet:

Absolutely. So, this bucket, let’s say, of the portfolio currently constitutes around 15%.

That’s where we see big opportunity.

Now you asked about risk. Where do we see risks?

We see risks in a number of areas, valuations, and we have been trimming where we see valuations becoming more stretched and we need to be careful about that.

The second risk is, of course, that the infrastructure buildout goes too far in some of the announcements that are being made and we’re watching that very closely.

Fan Ye:

And the numbers become too big to make sense.

Alistair Wittet:

Exactly. So, we’re watching that closely.

And then finally, there is of course risk in those businesses that might be disrupted by the technology. So, the businesses in the software and the data space.

And for that, we’ve been quite methodical about thinking about a framework to help us assess that risk. We’ve created a model where we look at the 10 moats associated with the software or data business and we think that broadly speaking, five of those moats are substantially reduced by AI and we think the others are, if not untouched, perhaps even enhanced by AI.

So where do we see the biggest risk?

We see the biggest risk in businesses exposed to workflows, to public data and to talent scarcity and we see the biggest opportunity where these businesses have their own proprietary data, cleaned data sets, where there is a regulatory or compliance lock-in and where there are strong network effects.

I think for us, the biggest risk at the moment is valuation. We want to make sure that the valuations reflect the fundamentals and where we think they are running a little bit ahead of the fundamentals, then we look to trim and where we think they run behind, we might look to add.

The real valuation is what is holding us back from having a bigger exposure to these businesses.

Fan Ye:

So, it is the discipline, isn’t it?

Alistair Wittet:

Yeah.

And I think we want to keep the balance of the portfolio.

We currently have a 15% exposure to this, and I think that’s reasonable given where we are in the cycle.

Fan Ye:

Okay, so what kind of changes have we made to the portfolio this quarter?

And are there any new names being added or names being removed?

Can you run through those?

Alistair Wittet:

We’ve built two new positions in Ferrari and Richemont. So, we found an opportunity to build positions in the luxury sector where previously we had no exposure.

We’ve also added two positions like Halma largely due to their photonics business, which is we think going to drive stronger growth for longer than expected.

And we’ve added slightly also to RELX and Experian these are two data businesses that sold off on fears around AI.

To fund those purchases, we exited three names, ASSA Abloy, Nemetschek and Novo Nordisk, all three either because we see deteriorating fundamentals or because, quite simply, we see better opportunities to redeploy the capital.

Fan Ye:

Which company, if you allow me, in the European portfolio, are you most excited about and why?

Alistair Wittet:

Well, that’s very difficult. You’re asking me to choose between my children.

And that’s not easy.

But I mean, I think if I had to think of one company which I think is probably the most underappreciated and where we think there is a great long-term opportunity, that would be Games Workshop.

Fan Ye:

Oh, what a surprise. I think the share price has appreciated a lot.

Alistair Wittet:

I know, I know, but I think there’s still a lot further to go. So, Games Workshop is the owner of the Warhammer franchise, it has seen huge success in recent years. It’s been reinvigorated under new management who started about 10 years ago.

And what pleases us the most is that the reinvigoration of the hobby is not just in its core UK market, but they’re seeing real traction in continental Europe, real traction in the US, which is of course a huge long-term opportunity. And even in Asia, we’re seeing early signs, early exciting signs in Japan.

So, we think this is a story that has a lot more legs to go.

Fan Ye:

It’s really going global and going maybe from very small niche to slightly bigger niche.

Alistair Wittet:

Absolutely, it stays a niche. In the UK, we estimate that there may be around one million or less hobbyists. That’s about a percent or one and a half percent of the UK population. So, it’s still very much a niche, but as you say, it’s becoming just slightly less of a niche.

And it’s of course helped by global games franchises, computer game franchises that have helped elevate the brand and Amazon are currently filming a multi-part series with Henry Cavill on one of the main character of the Warhammer franchise, which we think will only help to further elevate the brand or elevate the hobby.

Fan Ye:

Excellent.

I think the team was also very busy researching new ideas?

In the quarter, is there any research ideas that did not make into the portfolio, but you really like it?

Alistair Wittet:

Yeah, we’re constantly looking at opportunities out there. We have a market cap range or scope within the portfolio, which goes from around a billion all the way up. So, there’s a lot of opportunities, especially in that mid-cap space. I think we initiated on seven new ideas in the quarter, and we continue to look at new ideas. One that we looked at quite closely, we think is interesting, but we think there’s still more work to do is GTT. This is a French business with a leading IP in LNG transportation membranes used pretty much by all LNG transportation ships in the world.

So, we think this is a very interesting franchise, substantial long-term growth opportunities, but we’re still assessing just how defendable this franchise is.

Fan Ye:

So more on that maybe later.

Excellent. We’re looking forward to hearing more about it.

Thank you Alistair for your time today and for all the good insights.

Don’t hesitate to contact the Aecus IR team should you have any further questions.

Important Investment Disclaimer

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact, nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in April 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.

Note on Performance Information
In accordance with Article (4) of Commission Regulation (EU) No 583/2010, implementing Directive 2009/65/EC (the UCITS Directive),
Fund performance data may only be shown after 12 months of performance history

Dear Investors,

Welcome to the Aecus Europe Equity Fund’s first quarter commentary for 2026, summarising the period from 31 December 2025 to 31 March 2026.

The period was marked by the war in Iran, driving down share prices for the market and the portfolio alike. From a fundamental standpoint, while the direct effects of the war are limited (sales exposure to the Middle East is just 2%), it is the second order impacts on inflation and interest rates that are more relevant. We continue to believe it is quality businesses that are best placed to face these challenges.

Valuations, meantime, have contracted further, pointing to attractive double-digit medium-term return potential for the portfolio. The full year earnings season confirmed that 2025 ended strongly for portfolio companies and leads us to look towards 2026 with confidence.

As usual, in this report, we outline our view of the portfolio fundamentals, the share price performance of our companies, the topics that have preoccupied the investment team, the portfolio moves we have made over the period and our outlook. Please note that as we are still within the first 12 months of the Fund, we are unable to provide fund performance statistics, in accordance with European regulation.

Portfolio Fundamentals

Q1 was 2025 results season
With companies reporting prior calendar year results and providing guidance for the years ahead, Q1 is always a good opportunity to take the pulse of portfolio fundamentals.

- Weighted average portfolio constant currency organic sales growth for 2025 was +9%, somewhat ahead of our expectations. This remains a crucial metric for us, as we believe that organic growth is the most repeatable, most visible and usually the most profitable form of growth. The weaker US Dollar led to reported sales growth of +7%, due to portfolio companies’ 35% revenue exposure to North America.
- Despite multiple macro headwinds (tariffs, currency fluctuations, geopolitical uncertainty and consumer softness), the portfolio in aggregate delivered +7% earnings per share growth. Excluding currency effects, we estimate this translates to double digit growth. The resilience of the portfolio’s earnings to tariffs and weak consumer confidence demonstrates our portfolio companies’ quality and defensive characteristics.
- 2026 guidance, for those companies who provide it, points to another strong year ahead of high-single digit organic sales growth.

Aecus Europe Equity Fund – Organic Sales Growth*

Those companies that impressed us most:

- Galderma, the recently listed leader in dermatological beauty, upgraded its 2025 guidance twice during the year and raised its mid-term outlook too. The company is seeing better than expected demand for its fillers and biostimulators portfolio, while also raising its peak sales estimate for Nemluvio, a patented cream for severe skin irritations. In February, L’Oréal increased its stake to 20% and has requested 2 seats on the board. We have been adding to our position.
- ASML reported a strong set of 2025 results and guided to another year of double-digit growth in 2026, despite market fears 6 months ago that revenue would decline. As we expected, the boom in datacenter and AI spending is feeding down the funnel to the only manufacturer of advanced lithography machines: ASML. It remains the portfolio’s top position.
- Campari delivered gravity-defying underlying organic growth in 4Q25 of +4.7% in a declining spirits market. The Aperol engine returned to growth while free cash flow improved handsomely.

There were also disappointments in the results season, namely:

- Carl Zeiss Meditec (circa 2% position) reported disappointing fiscal 2026 first quarter results and removed their FY26 guidance, just a month after it was issued. They are also searching for a new CEO. We continue to believe Carl Zeiss has amongst the best and most admired product portfolios in the industry, but we now need to gain confidence in the ability of the new management team to execute on that potential. The position remains under review.
- Dassault Systèmes (circa 2% position) issued disappointing 2026 guidance, expecting only +3-6% constant currency EPS growth. After a challenging 2025, the company has taken the decision to guide conservatively. We await evidence of stabilisation in their Life Sciences and Mainstream verticals before turning more positive.
- Lindt (circa 4% position) also issued lower than expected 2026 guidance of +4-6% organic sales growth (vs +6-8% expected). We see this as transitory, following 3 years of sharp price increases to offset cocoa cost inflation.

Portfolio Performance Update

Following the first 12 months of the Fund, we will be providing Fund performance data and performance attribution information regarding key contributors and detractors.

In Q1 the Fund’s NAV[1] fell from €94.5365 to €86.5554, whilst the MSCI Europe index fell by 0.9%.

Performance in 2026 to date has been marked by two important factors:

AI investments continue to surprise positively, leading TSMC, the world’s leading chip manufacturer, to upgrade substantially its capital expenditure expectations. This lifted the entire semiconductor value chain, and in particular the portfolio’s holdings in Seagate Technology, ASML and VAT (and to some extent Halma).
The war in the Middle East led equity markets to fall sharply in March, with the Fund marginally underperforming in the sell-off. Traditionally defensive sectors such as Healthcare and Consumer Staples did not prove defensive, while the Energy sector rallied. This reflects the market’s continued focus on inflation and interest rates, to which the Healthcare and Consumer Staples sectors are more sensitive, rather than the economic cycle, to which these sectors are less sensitive (hence their ‘defensive’ moniker).

Sector performance (%) from start of Iran war to trough
(MSCI Europe 28/02/2026 – 20/03/2026)

The last major economic downturn was almost 20 years ago, which may explain the market’s lesser focus on cyclicality as a factor. We are of the opinion that economic cycles are not a thing of the past, and continue to prefer companies that are defensive, in the traditional sense of the term. We believe the indiscriminate nature of the selling is creating unique buying opportunities in defensive sectors.

Among the top contributors

- Seagate Technology, ASML and VAT all benefitted from earnings upgrades on the back of stronger than expected semiconductor spending to support datacenter buildouts.
- Campari delivered better than expected Q4 results, as discussed above.

Among the top detractors

- Carl Zeiss reacted to the weak results noted above.
- Coloplast continued to slide on minor earnings downgrades. The company has named a new CEO, Gavin Wood, who will start on May 1^st.
- Experian, Adyen and RELX fell following Claude AI’s latest release, triggering a sell off concerning perceived “AI losers”. We added marginally to Experian and RELX on the weakness, based on the belief that not all software businesses will suffer from AI. More on this later.

What have we been thinking about?

Company research

Our main activity is researching companies, both those we own, and those we don’t. This is the most important ingredient of our long-term performance.

In addition to the usual management meetings, our investment team hit the road to meet companies at their headquarters. We travelled, among others, to Switzerland to meet VAT, to London to meet Wise and to Amersham to meet divisional management of Halma. We have further trips planned for Q2.

In addition, we worked on a number of new ideas across different sectors from LNG transportation to biscuits and from veterinary product providers to semi suppliers, mostly in the mid-cap space. We will continue to explore new ideas wherever we can to replenish our portfolio bench and create as much competition for capital as we can in the portfolio.

The impact of the War in the Middle East

The direct impacts of the war in Iran appear to be fairly limited, the Middle East accounts for just 2% of portfolio sales. The indirect implications are far more relevant, from the inflationary effects of the war, not least on consumption, to the implications for interest rates. We view these indirect impacts as part of the usual macro uncertainties companies face and believe it is quality businesses that are best armed to deal with them. Like most, we hope for a quick resolution to the conflict.

As the CFO of a portfolio company remarked to us, “running a globally active company like ours is much more challenging than it was five years ago”. Whether it be tariffs, the wars in Russia and the Middle East, supply chain stresses or currency fluctuations, global businesses do indeed face more challenges than before. Swiss companies are looking to reduce their Swiss Franc cost base due to the currency’s strength, healthcare companies are building local manufacturing presence in China to be eligible for local to local sourcing, US exposed companies are looking to optimise their supply chains to minimise the effects of tariffs, and where they can’t avoid them they are pushing through price increases. We do not believe this changes the long-term prospects for high quality global businesses – countries still want access to the best products and services and are willing to pay for it – but it sets the bar higher for innovation and operational flexibility. The ability for a company to adapt is becoming an increasingly important investment criterion in our selection process.

Wiggly Worms – continuing to show signs of stabilisation

In our December 2025 commentary we showed how earnings estimates for portfolio businesses had experienced a Covid boom and a post covid hangover, more recently suffering from the weak US Dollar and tariffs. At the time we noted recent signs of stabilisation. We updated the chart below to show that stabilisation has continued. The recent strengthening of the US Dollar is not yet reflected in these estimates and should provide further support.

Wiggly Worms: earnings estimates showing signs of stabilisation[2]
(Simulated back-test of the March 2026 portfolio)

Artificial Intelligence

AI remains a key focus. In the quarter, perceived AI victims (RELX, Experian, Amadeus, Dassault Systèmes, Adyen, combined 15%[3] of the portfolio) de-rated by between 20% and 40%, before partially rebounding. The market fears the phantom threat of AI and is selling indiscriminately. We are taking a more nuanced approach and have developed an AI Disruption Risk Index based on 10 software moats to appraise the AI risk (or opportunity) for each of our data and software businesses. Some moats are stronger than others in the AI era. Proprietary data, regulatory/compliance lock in and network effects are far stronger than workflow moats, public data and talent scarcity. As a result, we exited Accenture last year and added marginally to RELX and Experian during the sell-off earlier this year. The internet was a revolutionising technology in the late 1990s, and while it was disruptive to some, it was above all a powerful tool for those incumbents that adopted and adapted to it. We see AI in a similar way.

On the flip side, the portfolio has circa 15%³ exposure to businesses involved in the AI infrastructure build-out, from semiconductors, to datacenter power and networking leaders.

Portfolio Moves

During the quarter we took advantage of market volatility to trade more than usual. We exited Assa Abloy, Nemetschek and Novo Nordisk and built new positions in Ferrari and Richemont. These companies offer high-quality growth by combining scarce, heritage-driven brands with pricing power, loyal global customer bases, and controlled distribution, enabling high-margin, repeatable growth. We substantially increased our position in Halma, added to Sika and topped up RELX and Experian on weakness. We trimmed our semiconductor exposure (ASML, VAT and Seagate Technology) on price strength.

Outlook

Valuations of quality businesses have continued to normalise from their 2021 peak. Comparing the valuation of today’s portfolio with its own simulated history, the portfolio in aggregate trades on a similar multiple today to what it would have done a decade ago, before quality-growth valuations expanded.

Simulated portfolio: valuation backtest – Current portfolio (NTM P/E) [4]

In the meantime, earnings estimates continue to show signs of stabilisation. We estimate low double-digit earnings per share growth for the coming 5 years, far above the MSCI Europe index. Our Total Shareholder Return model points to low-mid teens annual returns over the coming 5 years, with valuation no longer expected to be a headwind for the first time since the pre-covid era.

We thank you again for your interest in the Fund and warmly welcome you questions and comments.

Until next quarter,

Alistair, Arnaud & Sébastien

[1] S EUR ACC share class of the Aecus Europe Equity Fund

[2] Source: LSEG Workspace/Aecus Partners as of 26/03/2026.

Evolution of consensus next twelve months Earnings Per Share (NTM EPS) estimate for a given calendar year aggregated by asset weight at portfolio level of the Aecus Europe Equity Fund and based on LSEG Workspace market consensus. Portfolio weights as of 26 March 2026, rebalanced quarterly back in time. For any date of the simulation when a position was not yet listed, the portfolio was rebalanced excluding that stock. “CY”: Calendar Year.

[3] Portfolio weight as of 31 March 2026

[4] Source: LSEG Workspace/Aecus Partners as of 26/03/2026.

Note for the back-test: simulated Price to Earnings for the next twelve months (NTM P/E) using the portfolio of the Aecus Europe Equity Fund portfolio as of 26/03/2026. Portfolio weights as of 26 March 2026, rebalanced quarterly back in time. For any date of the simulation when a position was not yet listed, the portfolio was rebalanced excluding that stock. This does not reflect the actual portfolio P/E since launch, but a simulated calculation of a static portfolio measure for illustration purpose. The actual NTM P/E (ex-Cash) of the Aecus Europe Equity Fund since launch on 30/06/2025 is shown separately with the blue line.

Important Information

Issued by Aecus Partners SAS which is regulated by the Autorité des Marchés Financiers (AMF). RCS Paris n° 933 708 976 Agrément AMF n°GP20240027 (https://www.amf-france.org/fr, 17 place de la Bourse – 75002 Paris). The Fund is a sub-fund of the ICAV, an umbrella fund with segregated liability between sub-funds. The Fund is authorised by the Central Bank of Ireland as a UCITS pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations. The ICAV has delegated UCITS management company functions to Aecus Partners SAS as its UCITS management company. The ICAV is authorised by the Central Bank of Ireland pursuant to the Regulations and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations. The distributor of the Fund is Aecus Partners SAS. This financial promotion has been approved by Zeyro (FRN 1001386) on 15 April 2026. This Fund may be suitable for investors seeking long-term capital growth from European equities, who can commit to a five-year investment horizon and tolerate medium volatility and potential capital loss. It is not suitable for investors requiring capital protection, guaranteed returns, or access to capital within five years.

This document is a communication for information purposes only intended for professional clients. Please refer to the Fund’s prospectus and key information document before making any final investment decision. These documents are available free of charge, in paper or electronic format, from the Fund’s Investment Manager, as well as on the Manager’s website: https://www.aecuspartners.com. This material may not be copied, reproduced, communicated or redistributed, in whole or in part, without prior authorisation from Aecus Partners SAS. Any entity responsible for forwarding this material to other parties takes responsibility for ensuring compliance with applicable financial promotion rules. This material does not constitute a subscription offer and cannot be equated with a recommendation or investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. Any specific securities identified and/or described in this document do not represent all of the securities purchased, sold, or recommended for the Fund and no assumptions should be made that the securities identified and discussed were or will be profitable. The information contained in this material may be partial information and may be modified without prior notice. It is not individually tailored for or directed to any particular client or prospective client. Prospective investors should consult their financial adviser before making an investment decision. The sources used to carry out this reporting are considered reliable, however no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Aecus Partners SAS, its officers, employees or agents. Aecus Partners SAS accepts no responsibility for any direct or indirect losses caused by the use of the information provided in this document.

All data is as at the document date unless indicated otherwise. Performance data herein relates to the Aecus Europe Equity Fund (the “Fund”). Net asset value performance (NAV) data has been calculated on a NAV-to-NAV basis and is net of management fees and operating expenses, with any income reinvested. A detailed description of the charges that apply is set out in the Prospectus. The ongoing charges figure may change over time. Company holdings and performance are likely to have changed since the report date. Company information, including performance calculations and other data, is provided by Aecus Partners SAS. Past performance may not be a reliable guide to future performance and investors may not get back the amount invested. If an investor’s own currency is different from the currency in which the Fund is denominated, the investment return may increase or decrease as a result of currency fluctuations. All investments involve risk. The value of the investment and the income from it will vary. The figures quoted relate to past periods and past performance is not a reliable indicator of future performance. The Fund uses the MSCI Europe Net Index (source: MSCI) as a comparator benchmark to compare performance. The Fund is actively managed and is not constrained by any benchmark. Glossary of terms: please refer to the website. Access to funds of an ICAV managed by Aecus Partners SAS may be subject to restrictions regarding certain persons or countries.

EEA – Access to the Fund may be subject to restrictions regarding certain persons or countries. The Fund’s Prospectus and KIDs can be obtained by visiting www.aecuspartners.com and are available in one of the official languages of each of the EU Member States into which the Fund has been notified for marketing under the Directive 2009/65/EC (the UCITS Directive). The Fund is currently notified for marketing into a number of EU Member States under the UCITS Directive.

UK – This Fund is a sub-fund of an Irish UCITS authorised by the Central Bank of Ireland and is not authorised by the UK Financial Conduct Authority (FCA). The Fund is recognised in the United Kingdom under the Overseas Funds Regime (OFR) in respect of certain share classes only. Only those share classes that have been recognised under the OFR may be marketed to investors in the UK. As an overseas fund recognised under the OFR, the Fund is not subject to UK sustainable investment labelling and disclosure requirements. The protections provided by the UK regulatory system, including access to the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS), do not apply. This document is for information purposes only and does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised. Cancellation rights do not apply, and U.K. regulatory complaints and compensation arrangements may not apply. This material is issued and approved by Aecus Partners SAS which is authorised and regulated by the Autorité des Marchés Financiers (AMF).
Glossary of terms: please refer to the website
Contacts Aecus Partners: bonjour@aecuspartners.com – +33 (0)1 84 80 81 82 – 128 rue du Faubourg Saint-Honoré – 75008 Paris

Insights

This section brings together Aecus Partners’ insights, perspectives and communications. It features a curated selection of content — podcasts, interviews, market updates and commentary — designed to share our views on portfolio companies and investment dynamics. These materials reflect our convictions at a given point in time, with the aim of providing a clear, structured and accessible perspective on complex topics.

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Aecus Partners

Europe Equity

Continental Europe Equity

Global Equity

Q1 26 insights – Podcast European Equity Strategy

Important Investment Disclaimer

Portfolio Fundamentals

Portfolio Performance Update

What have we been thinking about?

Portfolio Moves

Outlook

Important Information

Q4 25 insights – Global Equity Strategy

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Q3 25 insights – Continental Europe Equity Strategy

Q3 25 insights – European Equity Strategy

Q4 25 insights – Continental Europe Equity Strategy

Q1 26 insights – Podcast Continental Europe Equity Strategy

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