Fund Commentary

Contributors: Trip.com Group Ltd. surged to its highest close of the year, buoyed by a 16% year-on-year revenue increase in Q2 and a 26% rise in net profit. The rebound in China’s travel sector, especially inbound and outbound bookings surpassing pre-COVID levels, significantly boosting investor sentiment. Sony Group Corporation saw its stock rise over 12% during the month, driven by robust Q1 earnings and optimism around its gaming division. The company reported strong sales growth and raised its annual profit outlook, benefiting from increased PlayStation 5 engagement and new product launches in its INZONE gaming gear line. Elevance Health, Inc. outperformed in August after Warren Buffet’s Berkshire Hathaway Group took a stake in peer in-surer United Health, and in so doing, highlighting value across the sector. The shares had been weak in July after 2Q results.

Detractors: The largest negative contributor to performance was not owning Apple Inc., one of the ‘unowned’ magnificent 7, costing the strategy more than 100 bps in August. Apple’s shares rose over 9% during the month, driven by a combination of strategic announcements and easing macroeconomic pressures. A key catalyst was the company’s pledge to invest an additional US$100 billion in U.S. manufacturing, bringing its total commitment to US$600 billion over four years, a move that likely helps Apple secure exemptions from proposed semiconductor import tariffs. Oracle Corporation fell 13% during the month as investor sentiment turned sharply negative following news of job cuts in its cloud division and rising AI infrastructure costs. Despite securing major AI-related contracts, including a multibillion-dollar deal with OpenAI, the market grew wary of Oracle’s ability to sustain earnings upgrades, thereby ending its recent stock momentum. TransDigm Group Inc. underperformed despite announcing a hefty $90 per share special dividend. The stock was weighed down by disappointing Q3 results - driven by slower-than-expected production at Boeing and Airbus - which led to a downward revision in revenue guidance. Concerns over its aggressive use of debt to fund shareholder returns also weighed on the shares.