LHV World Equities Fund

In May, we saw growing inflationary pressures in the global economy, which were positive for our investments. Markets were most surprised by the US inflation figure, which rose by 4.2% year-on-year in April. Fund unit value increased by 1%. In a higher inflation environment, our gold positions rose the most. Increased global inflationary pressures raised the price of gold by 7.7% and the share prices of gold mining companies by more than 10%. Gold miners remain one of our largest equity investment as of now. In equity markets general, energy and material companies performed well and banking sector also posted good returns. However, many equity indices declined as fears of inflation risks emerged. Speculative assets, led by cryptocurrencies, fell sharply, with Bitcoin falling 33% during the month. In an environment of rising input prices, we hold fund’s equity positions largely in the commodity and material sector, where we see the best opportunities in the long run. The proximity of the commodity sector to key inputs means that it is one of the few places where corporate profits could increase significantly in the coming years. Fund’s key positions from other sectors remain in the Nordic equity markets. In May, we added shares of Stora Enso, UPM Kymmene, Epiroc and Pan American Silver from our existing positions. From the new positions, we bought the shares of the Chinese e-commerce giant Alibaba, where we took advantage of the weakness in the share price due to the stricter regulatory restrictions. We sold the copper mining company Antofagasta position, whose share price has risen sharply over the past year due to the rise in copper prices.