IMP Global Megatrend Umbrella Fund Commentary

Global markets ended October on a strong note, underscoring the resilience of the current bull market despite recurring political and geopolitical challenges. The S&P 500 gained 2.3% for the month, marking its seventh consecutive monthly advance and reaching a new all-time high, while the MSCI All Country World Index also rose for a seventh straight month, the longest winning streak for both benchmarks since 2021. Even as the U.S.-China trade relationship briefly came under renewed pressure and the U.S. government shutdown extended into its fifth week, investors largely looked through the noise. Robust corporate earnings, solid consumer spending, and further moderation in inflation provided reassurance that the expansion remained intact. Institutional strategists from UBS, Morgan Stanley, BlackRock, and J.P. Morgan broadly agreed that the greatest risk to investors lies in overreacting to short-term events rather than remaining aligned with enduring structural trends. Across leading investment firms, the consensus view for October was clear: earnings strength, policy discipline, and secular innovation, particularly in artificial intelligence, continue to underpin U.S. equity market leadership. Against this backdrop, the IMP Global Megatrend Umbrella Fund delivered a 2.62% return for the month, bringing its year-to-date gain to 15.32% as of October 31, 2025, net of fees.

This positive market momentum was reinforced by third-quarter earnings results, which exceeded expectations across most sectors. Mega-cap technology firms once again delivered standout performances, confirming that corporate America’s investment cycle in AI, cloud computing, and digital infrastructure continues to accelerate. Alphabet, Apple, and other top ten holdings predominantly reported stronger-than-forecast revenue growth and expanded 2026 capital expenditure guidance tied to AI data center build-outs. Collectively, these companies invested over USD 60 billion in capital expenditures last quarter, a record level highlighting their commitment to long-term innovation and the rapid scaling of next-generation technologies. Strength also extended beyond technology. According to UBS data, revenue growth across the S&P 500 is tracking above 7% year-on-year, and third-quarter earnings per share are estimated to have risen about 12%, compared with initial forecasts of 10%. Roughly 80% of reporting firms beat consensus earnings estimates, one of the highest ratios in the past five years. Sectors tied to domestic demand, including consumer discretionary, health care, and industrials, also showed solid trends.

Even amid this environment of resilient fundamentals, stretched tech valuations have drawn greater scrutiny. While intensified skepticism has grown, we deem the current levels as warranted, underpinned by earnings strength and structural profitability. Additionally, valuations have historically had limited predictive power for 12-month returns, as earnings momentum and the policy backdrop remain more reliable drivers. Headline forward P/E ratios also reflect the evolving composition of modern indices, with Information Technology and Communication Services now making up roughly 40% of the S&P 500, up from less than 20% two decades ago. Adjusted for this structural shift, the forward P/E of the MSCI All Country World Index is near its long-term mean, with today’s tech leaders trading around 30× forward earnings, well below the late 1990’s dot-com peak. That said caution is warranted, as frothier

pockets of the market, particularly unprofitable companies, remain susceptible to drawdowns, as certain price trajectories have become unconvincingly elevated.

Monetary policy and structural trends shaped markets in October. The Federal Reserve cut rates by 25 basis points to 3.75-% - 4.00%, with September inflation slowing to 3.0% year-on-year, below consensus but still above the 2% target. With the government shutdown disrupting official data, the Fed relied on alternative indicators showing continued moderation in headline and core inflation. Chair Powell emphasized that further easing is data-dependent. Quantitative tightening ended to preserve liquidity and support stable bank funding, signaling confidence amid ongoing uncertainty. The shutdown had a modest drag on GDP, while markets viewed the Fed’s stance as balanced; restrictive enough to anchor inflation yet supportive of growth. Structural factors, including the U.S.-China trade truce and strong U.S. tech earnings, highlighted how AI, digitalization and supply-chain shifts are increasingly influencing returns.

This backdrop allowed us to maintain a disciplined investment approach, selectively realizing gains from strong performers and redeploying capital into high-conviction opportunities aligned with our long-term megatrend themes of Healthcare Innovation, Shifts in Economic Power, and Smart Infrastructure/Smart City. October was marked by active portfolio rotation, tactical accumulation at attractive valuations, and prudent de-risking as markets are likely to experience heightened volatility into year-end. While momentum in the market remains sustained for the time being, we continue to exercise caution, recognizing that periods of unusually strong performance often call for disciplined profit-taking. Within Healthcare Innovation, we increased our position in Novo Nordisk A/S, taking advantage of share-price consolidation to re-enter at an attractive level, supported by expanding channels and growing optimism around its Alzheimer’s pipeline.

Under Shifts in Economic Power, we added to MercadoLibre Inc. following a short-term pullback, viewing it as an opportunity to accumulate a market leader at a compelling valuation. We also increased exposure to Klarna Group PLC after its partnership with Google Cloud to enhance AI-powered shopping experiences, strengthening its position within the BNPL market. Within Smart Infrastructure, Smart City, we added to NuScale Power Corporation, benefiting from renewed investor interest in nuclear energy driven by surging electricity demand from AI-related infrastructure. We also accumulated shares in Prysmian S.p.A. after an earnings-related dip, maintaining confidence in the company’s ability to capture growth from Europe’s electrification and data center expansion trends.

On the divestment side, we executed partial sales in Tesla Inc., Constellation Energy Corp., Coinbase Global Inc., Nebius Group NV, Galderma Group AG, Schneider Electric SE, Alphabet Inc., and NVIDIA Corp., realizing strong year-to-date gains while managing concentration risk. To enhance portfolio stability, we also initiated and expanded a position in the iShares $ Treasury Bond 0 to 1 Year UCITS ETF, redeploying liquidity into short-term U.S. government bonds, a de-risking measure that allows us to maintain flexibility and capture yield amid potential heightened volatility.

Looking ahead, October reaffirmed that the U.S. economy remains the anchor of global market leadership. Inflation continues to moderate without derailing growth, consumers remain broadly resilient, and corporate investment in transformative technologies shows little sign of slowing. Additionally, a more than probable resolution to the U.S. government shutdown would likely reinforce market sentiment. While policy uncertainty and intermittent volatility persist, the underlying narrative is coherent, steady disinflation, robust earnings, and long-duration growth drivers continue to support a constructive view on risk assets. We expect the Federal Reserve to proceed cautiously, cutting rates further only if warranted by data, while maintaining ample liquidity to ensure smooth financial conditions. In this environment, we continue to favor U.S. equities, particularly AI, infrastructure, utilities, and healthcare, alongside selective short-duration fixed income as portfolio ballast. Ultimately, achieving sustainable requires equanimity, disciplined decision-making, and the humility to recognize when to let gains compound and when to reduce exposure. The identified megatrends shaping this cycle, continue to define the evolving opportunity set, underscoring the importance of staying invested, remaining diversified, and never mistaking momentum for immunity.

Thank you for your continued trust and support.

Stefan Wiederkehr & Karin Wiederkehr

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IMP Global Megatrend Umbrella Fund Commentary - 31 October 2025