Q4 2025 Fund Commentary

Commentary and opinions are provided by JPMorgan Asset Management (Canada) Inc..

Market commentary

Global equity markets rose. Investor enthusiasm for artificial intelligence (AI) was offset by shifting monetary policy and changing trade dynamics. Value stocks outperformed growth.

U.S. equities rose, supported by U.S. Federal Reserve Board interest rate cuts and progress in U.S.-China trade negotiations. European equities rose, benefiting from a positive earnings outlook and lower information technology exposure. Japan's Tokyo Stock Price Index led regional performance under the new Prime Minister, Sanae Takaichi.

Commodity performance was mixed, with oil prices down and precious metals rising to all-time highs. Emerging markets delivered varied performance, with Chinese tech stabilizing and South Korean and Taiwanese equities consolidating after strong year-to-date gains.

Performance

Overweight exposures to NatWest Group PLC, SSE PLC and AstraZeneca PLC contributed to the Fund’s performance. NatWest Group showed growth in income and returns, driven by customer activity and cost management. SSE announced an investment plan across U.K. electricity grids and renewable energy over the next five years. AstraZeneca reported sales momentum across its oncology, rare disease and biopharmaceuticals franchises. In addition, a series of favourable Phase III trial results and key regulatory approvals helped investor confidence in the company.

Overweight exposures to 3i Group PLC, Ajinomoto Co. Ltd. and Sony Group Corp. detracted from the Fund’s performance. 3i Group saw a slowdown in trading, particularly in France. Ajinomoto came under pressure from increased competition in its frozen food business. Sony Group was affected by an increase in memory prices, impacting its PlayStation 5 console’s profitability.

At a sector level, stock selection in the utilities and information technology sectors contributed to the Fund’s performance. Selection in the financials and consumer discretionary sectors detracted from performance.

At a regional level, selection in the Pacific Rim region contributed to the Fund’s performance. Underweight exposure to the Pacific Rim region and overweight exposure to emerging markets contributed to performance. Stock selection in Japan and Europe detracted from performance.

Portfolio activity

The sub-advisor added to the Fund a holding in Tokyo Electron Ltd. for the company’s exposure to the AI infrastructure buildout. A holding in Hitachi Ltd. was increased to capitalize on the company’s shift from hardware to digital services. The company should refocus on higher-margin opportunities in digital, green energy and mobility. The Fund’s holding in BNP Paribas SA was sold because of Sudan sanctions litigation risk. The Fund’s holding in 3i Group was reduced to take profits after the company’s stock rose.

Outlook

The Fund has underweight exposure to the Pacific Rim region and Japan, and overweight exposures to the U.K. and the U.S. At the sector level, the Fund has underweight exposures to the health care and materials sectors and overweight exposures to the consumer discretionary and utilities sectors. The Fund has overweight exposure to premium or quality stocks as the sub-advisor believes stronger businesses have greater control over their own trajectories, which could be important in 2026.

In 2026, the sub-advisor anticipates fiscal stimulus in Europe and U.S.-dollar weakness. This could favour non-U.S. equities. The sub-advisor believes that 2026 should be a good year for profits globally, with corporate earnings growing across major industry groups in every region. U.S. companies are forecast to grow profits. Outside the U.S., the sub-advisor expects profits in emerging markets to grow

roughly 15%.

The earnings of the tech giants have been high, but the outlook for future AI demand is uncertain. Thus, the sub-advisor believes in diversification across the AI ecosystem, regions and public markets. In the sub-advisor’s view, regional diversification does not just mitigate risk, but can also enhance returns, as the past year showed.

The sub-advisor expects uncertainty and volatility in early 2026. The sub-advisor will aim to take advantage of that volatility to buy holdings in companies where share prices have become detached from long-term potential.