Global capital markets experienced sharp volatility around AI hardware in July, as semiconductors, memory and other compute-related assets moved through rapid deleveraging, an oversold rebound and a subsequent return to fundamental repricing. In our view, the market is shifting away from highly optimistic expectations and placing greater emphasis on actual earnings delivery, order visibility, cash-flow quality and durable competitive advantages. The Fund moderately reduced risk exposure to AI compute-related companies early in the month, while continuing to monitor the broader shift in value creation from hardware toward cloud platforms and AI applications. At the same time, Chinese internet leaders have begun to recover as progress in AI applications, cloud growth and model capabilities becomes more visible, while innovative healthcare is also benefiting from improving fundamentals and a gradual easing of the liquidity pressure seen in the first half. Looking ahead, we will remain focused on high-quality AI assets with sustainable fundamentals, leading Chinese internet companies with strong application ecosystems, and innovative-drug companies where valuations remain attractive and clinical or BD catalysts continue to develop.

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.