Monthly Commentary - April 2021 MARKET ENVIRONMENT Chinese equities were slightly higher in April after a volatile first quarter. The sell-off in Chinese shares late in the first quarter seemed technical in nature in our view, as opposed to fundamentally driven. Earnings growth expectations continue to reflect optimism in corporate profits supporting current valuations. Chinese year-over-year economic growth may have peaked reflecting the end of the low base effects experienced early in 2020. Monetary policy already reflects an economy having largely recovered whereby the government may be less accommodative going forward yet not ready to tighten. Regulatory pressures broadened within the internet-based consumer and IT sectors. Meanwhile, U.S.-China trade relations have been somewhat quieter in the media headlines during the month of April, following a contentious bi-lateral meeting in Alaska held in March. PERFORMANCE, CONTRIBUTORS AND DETRACTORS For the month ending April 30, 2021, the Fund returned 1.96%, while its benchmark, the MSCI China All Shares Index, returned 2.32%. From a sector perspective, the Fund’s holdings in industrials contributed to relative performance. In contrast, the Fund’s holdings in consumer discretionary detracted from relative performance. A contributor among individual stocks was Estun Automation Co., China’s leading robot manufacturer with strong technical capabilities and an 80% overall rate in component self-sufficiency. Amid recovery in the industrial automation industry in China, the company has seen a rebound in orders, creating positive sentiment and leading to stock prices gains in the month. We believe local companies, through price competitiveness and improving quality, stand to gain market share against foreign competitors in this industry, where foreigners still hold the lion’s share of the market. A detractor among individual stocks was e-commerce company JD.com, which experienced some price volatility amid rising regulatory pressures. While sentiment was weak in the reporting period, we remain constructive on the company over the long term. As the second largest e-commerce company in China, JD.com has a broad reach and its profitability is improving. China has many metropolitan densities and the complexity of making deliveries to most households is high, creating a competitive moat for an e-commerce player such as JD.com. OUTLOOK We remain optimistic about both the near-term and long-term growth prospects in China. Keeping the coronavirus under control is key to maintaining China’s V-shaped economic recovery. While China is only in the very early stages of its vaccination program, its strict border controls and data-driven approach to minimizing outbreaks remains highly successful. China’s approach to combatting the virus has been more effective than any other large economy. Because COVID is largely under control in China, people have been able to resume a normal life. Consumption is rising, auto sales are growing, restaurants have long lines and consumers feel comfortable gathering indoors. Over the long term, we expect that China’s growth will continue to be driven by growing domestic consumption. The depth and diversity of the opportunity set in China continues to expand, with a notable uptick in IPOs over the past 12 months. Key themes that we are following include technology upgrades, health and wellness trends, services that enhance quality of life and premium consumer goods. The team continues to look for attractive long-term growth opportunities driven by the Chinese consumer.