LHV World Equities Fund

In April, the major stock indices fell by 3-7%. The stock markets were pressured by higher-than-expected inflationary pressures, which raised expectations for interest rates higher. We see that financial markets are slowly adapting to the idea that inflation will remain uncomfortably high and that interest rates will not quickly fall to low levels. We try to offer a portfolio with the fund that is reasonably diversified, which helps protect the purchasing power of capital in a high-inflation environment. Stocks are only a good defense against inflation if you do not pay too high price for them. Currently, the concentration towards highly valued individual companies in popular stock indices (S&P500, Nasdaq) is exceptionally high. If individual large companies do well, the indices rise greatly; if they perform poorly, they fall greatly. Many popular indices offer low actual diversification. Fund unit value increased +1,5% with month. From the worlds largest US stock market, the fund has acquired companies related to natural resources. We see good inflation protection in commodity-related stocks. Commodity-related stocks trade cheaply against the profits earned. For example, the dividend yields of energy companies remain around 10%. Copper mining companies are a relatively inexpensive way to bet on the growing electrification trend. Another major area where the fund has chosen individual investments are the listed companies of Finland, Sweden, Denmark, and Norway. Nordic stock companies have a wide range of quality companies with a history, transparent financial reporting, and a stable economic environment. The funds largest individual stock positions from the Nordic exchanges are Metso, which produces mining equipment, and the forestry company Stora Enso. In April, we sold UPM shares from the fund, which had risen back close to their peaks. We see that the pulp market has received and will receive additional supply in the coming years, which may put pressure on pulp prices that are important for UPM.