Global equity markets showed unusually sharp divergence in the first half of 2026, with capital heavily concentrated in semiconductors, memory and AI compute hardware, while Hong Kong internet stocks, biopharmaceuticals and other growth sectors remained under pressure. The Fund's first-half performance was primarily affected by a temporary mismatch between its portfolio positioning and the market's strongest style rather than a broad deterioration in the fundamentals of its core holdings. Looking ahead, we believe market leadership may gradually broaden from pure AI capital-expenditure beneficiaries toward a wider range of businesses that can demonstrate commercialization, earnings delivery and sustainable competitive advantages. Chinese internet leaders are beginning to show progress in AI applications, cloud services and monetization, while the innovative-drug sector combines improving industry fundamentals with historically low valuations. We will continue to assess portfolio opportunities through fundamentals, valuation, liquidity and risk-reward, while managing overall portfolio risk and NAV volatility.

Risk disclosure: Market fluctuations may cause investment outcomes to vary. Investors should make rational decisions based on their own risk tolerance. This article is for general information only and does not constitute investment advice, an offer, or a solicitation. Past performance is not indicative of future results.