Global equities gained during the quarter. The fund outperformed the benchmark.

Stock selection was positive in Q4 across a number of sectors including consumer discretionary, financials and energy. The leading individual contributor was oil services firm Saipem. We purchased shares in Saipem in September after the rights issue, which was not fully subscribed.

The market had become concerned about the deterioration of the Italian oil service company’s financial position over the year owing to a number of bad contracts. A new CEO joined in summer 2022, and in October, Saipem announced a $4.5 billion contract in Qatar, representing its largest single offshore contract win in its history.

Elsewhere in the energy sector, oil majors Repsol and ENI also supported fund performance. Repsol announced strong results in October, increasing the dividend to 70 cent as well as implementing a buyback programme with the extra cash that the underlying business is producing.

The more positive "risk-on" sentiment during the quarter helped to support our automotive parts holdings Schaeffler and Continental. For German stocks generally, worries over high power prices and potential shortages have been allayed thanks to reductions in overall usage, plus generally mild winter weather which has seen gas prices fall. Materials group Heidelbergcement also benefited from these reduced worries over energy supply.