Global small-cap stocks continue to outperform for the sixth straight month.

The Fund returned +3.12% in February, underperforming the benchmark return of +3.34%.

Top Holdings (alphabetically)

Brenntag AG Germany Industrials

Dino Polska Poland Consumer Staples

Kindred Group PLC Malta Consumer Discretionary

NICE Information Service Korea, Republic Of Industrials

TFI INTERNATIONAL INC Canada Industrials

The Fund returned +3.12% in February, underperforming the benchmark return of +3.34%.

The drop in COVID-19 infections and the rapid worldwide vaccination rollout continued to drive global equity markets higher in February.  The easing of restrictions in several western countries and the prospects that full re-openings will go ahead in spring led to renewed investor optimism. Those factors coupled with a commitment by most central banks to continue stimulative measures provided support to global equity markets for the first half of the month.   As a result, global equity markets continued their rally, rising more than 2.5% in February measured by the MSCI World index.  In the US, the new “Rescue Plan” of close to $1.9 trillion recently passed.  The latest round of stimulus in addition to the COVID-19 relief package approved at the end of 2020 is expected to help buoy the economy through 2021.  Treasury Secretary Janet Yellen reiterated her support for the fiscal plan which bolstered investor confidence.  However, interest rates rose higher at the end of the month as investors began to worry about inflationary pressures, bringing the rally in US equities to a halt.  Broad gains were made in major European and Asian markets with the easing of COVID-19 restrictions across the regions. Global small-cap stocks (as represented by the MSCI World Small Cap Index) continued their strong run, outperforming their large-cap counterparts (MSCI World) for the sixth straight month.

Individual stock selection was the main driver of the Fund’s performance in February. Approximately 159 bps separated the top contributor and largest detractor.  As of 28^th February, the top 10 holdings accounted for approximately 30% of the Fund’s assets, with the largest position 5.08% of the portfolio at the end of the month. Regional and sector exposure remained consistent month over month. The Fund continues to be overweight small to mid-cap names vs the benchmark. The Fund has outpaced the benchmark 8 out of the past 13 months.

Cash holdings stayed consistent month over month as several new names were added to the portfolio.

The first addition to the Fund was Assai, a cash-and-carry discount food retailer based in Brazil. Assai spun out of its parent company, Companhia Brasileira de Distribuição, on the 1^st of March. Brazilian shoppers have embraced wholesale format stores in general given the relative value and range of products that they offer. The cash-and-carry model is the fastest-growing segment within food retail in Brazil. As a result, the company has continued to expand, growing the number of stores across the country. The company continues to produce outstanding returns and is trading at a significant discount to global peers.

The Fund also added an electronic commerce business based in Japan. The company provides an online market focusing primarily on shoes but also offers bags, apparel, and other accessories. This company has been operating under the institutional radar and has been a significant market penetration story.

The Fund increased its travel-related exposure by adding a new investment in a European online travel agency (OTA). We believe that with the easing of travel restrictions across the region, and continued distribution of COVID-19 vaccines, travel will continue to increase over the year.

The Fund also undertook some profit-taking in the month, trimming, or exiting, positions that have moved meaningfully and met our price targets. The Fund fully exited Cyberark, Yalla, Yeahka, and trimmed Prada, Kambi, and Kindred.