In the month of April the Fund (I-class) was down 1.8% versus the MSCI World Small-cap index (benchmark) that was down 2.8%. Year-to-date the Fund is down 3.9% outperforming the benchmark which was down 7.1%. On balance stock markets declined in April in a market that showed increased daily volatility. During the month the US treasury yield moved from 2.4% to almost 3.0% which was a tailwind for the MSCI World Small-cap Value index which declined only 1.1% in April outperforming the broader small-cap index. At the end of April Argo Group, a US insurance company, announced it will initiate an exploration of strategic alternatives. In March 2022 we sent a letter to the board with a proposal to start such a strategic review including the sale of the company. We have been shareholder in Argo Group since April 2018. Since we became shareholders, Argo Group has experienced a turbulent period characterized by pressure from activist investors and changes in the board and in the executive leadership team. In this process, we have taken a constructive and patient stance. After the recent, disappointing Q4 results driven by unexpected adverse prior year reserve developments, we believe this is the right moment to start a strategic review of Argo Group. We are therefore pleased with the board's decision to follow our proposal.

The three top contributing stocks in the month of April were West Fraser Timber (+13%), Abercrombie & Fitch (+14%) and TGS ASA (+10%). West Fraser Timber’s share price increased by 13% during April, reversing the decline witnessed in March, as North American lumber prices stabilized at relatively high levels. On the back of these high lumber prices, West Fraser reported strong Q1 earnings and cash flow generation. The company announced to deploy excess cash by buying back ~13-15% of its market capitalization, while still preserving a healthy balance sheet. Abercrombie & Fitch was up 14% in April. Also year-to-date the share price is holding up firmly, despite general macro concerns on consumer confidence and spending adversely affecting consumer related stocks. We benefited from the share price strength and took some profits accordingly. TGS was up 10% in April and is one of the best performing stocks in the year-to-date. The company, selling seismic data to the energy industry, is expected to benefit from the currently high oil & gas prices. We take a long-term view and used the strength in TGS' share price to take some profit.

Three negative contributors of the month were Ulvac (-19%), Befesa (-17%) and Fujitec (-12%). Ulvac declined by 19% during April without any company specific news. More generally, the covid-related lockdowns in Shanghai have created further challenges to the supply chain of the semiconductor industry, which could possibly affect Ulvac’s business as a leading equipment provider to the semiconductor industry. Befesa’s share price declined by 17% during the month, giving back the gains of March. Befesa reported quarterly results just mildly below expectations due to some higher operational expenses. We still believe Befesa’s management team is executing strongly on its strategic priorities, which create long-term opportunities. Fujitec declined by 12% during April. The shares performed well year-to-date, which resulted in a +25-35% performance gap in local currencies with international peers like Kone, Schindler and Otis. All of these peers reported mixed quarterly results, revealing challenges from inflationary pressure and slow-downs in China on the one hand, and resilience of the maintenance business on the other hand. Fujitec’s shares continue to trade at a substantial discount versus international peers.