# ANNUAL MANAGEMENT REPORT at 12/31/2021
and took profits on Euronext, Atos and Saint-Gobain. Dorval Convictions put in a virtually flat showing over the month vs. a near 1% drop on the market.
February: The markets continued to gain as performances reflected both the initial successes of the various vaccination campaigns worldwide and confirmation of the economic recovery under way on the back of the gradual reopening for economies that have made the most headway in their fight against Covid-19. In our portfolio over the month, we bolstered our construction sector exposure via Eiffage, as well as our holdings in the deeply discounted financial sector with Société Générale. In the same vein, we marched on with investments in the consumer sector via groups Ceconomy and Danone. The fund outperformed its reference indicator (50% EONIA Capitalization Index 7 D+50% EUROSTOXX 50 NR (EUR): +2.24%) by close to 0.5% over the month. The exposure rate remained at around 67%, putting the fund in a strong position to draw on the current recovery.
March: Dorval Convictions had gained more than 6% YTD as at March 31 – marking the end of the first quarter of the year – outstripping its reference indicator (50% EONIA Capitalization Index 7 D and 50% Euro Stoxx 50 NR (EUR)) after deriving the full benefits of the market rally. Solid share price trends can be attributed on the one hand to published economic stats that reflect the economic recovery under way as economies worldwide gradually emerged from lockdown, and on the other hand confirmation of the stimulus programs announced in the United States, with a
$1.9 trillion package as well as an infrastructure plan of $2.25 trillion up for discussion. Meanwhile, the various vaccination campaigns continued at a generally steady pace. Against this backdrop, we maintained our high equity exposure rate at around 83%. Additionally, the Fed confirmed that it would pursue its accommodative policy, giving investors cause to hope for a stable environment on the bond markets. In our portfolio over the month, we bought Pirelli and Richemont and sold Bouygues and Imerys.
April: The European markets continued to progress as countries successively emerged from lockdown and massive vaccination campaigns were rolled out in many areas across the globe. Economic stats demonstrated that countries were truly opening their economies, and also testified to the effectiveness of support programs. At this stage, we note that future stimulus plans had not yet had on impact on the world economy. Against this backdrop, central banks continued to reassure investors of their unfailing support. The performance indicator (comprising 50% EONIA Capitalization Index 7 D and 50% Euro Stoxx 50 NR (EUR)) naturally edged up 0.90% and Dorval Convictions gained close to 1.80%. We maintained a high exposure rate at around 76%. In our portfolio, we reduced our positions on Stellantis and Imerys and added to Richemont and Sanofi.
May: The markets pursued their rally against a broadly positive backdrop as economic activity resumed on the back of vaccination campaigns. Meanwhile, the stance from central banks remained highly accommodative while the situation on the bond market was easing. In light of these circumstances, we increased our exposure rate to around 80%. The earnings reporting season looked set to be broadly positive. Looking to our portfolio over the month, we took some
June: The European markets stabilized after a very strong showing over previous quarters. Against this backdrop, we decided to gradually cut back our equity exposure rate to around 81%, taking profits on stocks related to the recovery in consumer spending following their solid performances when economies reopened. We therefore cut back our investments in shopping malls, such as Mercialys and Klepierre, as well as retail groups (Ceconomy), particularly as the new Delta variant could prompt the health authorities to partly lock down economies that had recently opened. With the first half of the year having just drawn to a close, Dorval Convictions outperformed its performance indicator over the period.
Second half 2021:
July: The market displayed a flat performance, nudging up 0.37%, while the fund made small gains over the period. The market held very steady, despite the emergence of the Delta variant, which could have triggered consolidation after the market’s compelling rally over recent months. Investors seemed to be taking advantage of any dips to round out their positions. We set our equity exposure rate for the portfolio at around 60%. The earnings reporting season should bear out European companies’ resilient results and confirm the outlook for a recovery in the continent’s economy. Ongoing vaccination campaigns should rein in the fallout from the surge in the current variant and curb the effects of a future lockdown. In our portfolio this month we added to Edenred, Dassault Systèmes and Biomérieux, and took profits on Fnac and Crédit Agricole.
August: The markets pursued their solid trend as a result of encouraging corporate earnings reports, which outstripped the analyst consensus. Meanwhile continued progress on vaccination programs helped curb the fallout from the pandemic. Ongoing low interest rates along with central banks’ announcements of a very gradual tightening in monetary policy helped shore up the markets when faced with the slightest temptation from a certain number of investors to take profits. In this environment, we maintained our equity exposure rate at close to 70%. This month we trimmed our holdings in Klepierre and Mercialys and sold our position on EDF.
September: The markets fairly logically saw profit-taking connected to doubts surrounding renewed world inflation, whether passing or not. Disruptions and bottlenecks in world supply chains have jeopardized the recovery in business in a certain number of sectors. Meanwhile, the Fed’s policy was now moving towards a gradual and organized tapering in its bond market purchases, while maintaining an accommodative stance. Additionally, setbacks for several real estate development groups in China have fueled market concerns of a possible default that would trigger a real estate crisis. Against this backdrop, we brought our exposure rate to 53% by selling
In our portfolio, the management team continued to keep the exposure rate high at around 80%, and also added to investments in Euronext, Eni and Air Liquide as they seemed to harbor a promising growth outlook. Central banks pursued their support to shore up the economic recovery via very gradual and even moves to tighten monetary policy. In this environment, Dorval Convictions outperformed its reference indicator, comprising 50% EONIA Capitalization Index 7 D and 50% Euro Stoxx 50 NR (EUR).
November: The market was ready for some intermediate profit-taking after the rally over the past few months, and the new Omicron variant reported in South Africa acted as the perfect catalyst: with the seeds of doubt sown, the market swiftly priced in these much-feared effects. However, on the one hand, economic players seemed to have taken all the necessary arrangements to pursue their business as best they could while keeping the effects of the pandemic to a minimum, judging by corporate earnings reports, while on the other hand, the extensive vaccination campaign along with the third booster shot should keep a lid on the most severe forms of Covid. We had cut our exposure rate from 99% to 70% during the month, and then upped the figure to hold it at 83.50% as global economic activity took an uptrend across the board. In our portfolio, we cut back our holdings on Total and Pirelli.
December: The European markets continued to rally, fueled by news on the Omicron variant, which turned out to be less threatening, and more contagious than aggressive. Meanwhile, the Fed’s stance had now been well and truly priced in by the market, with expectations of up to three hikes to short-term rates in the United States as the central bank set its sights on tackling inflation. On this side of the pond, the ECB pursued its accommodative monetary policy.
In this environment, world growth was poised to remain robust, and companies will be in a position to report solid results again this year. Our equity exposure rate remained close to 100%. Dorval Convictions outperformed its reference indicator in 2021 (50% EONIA Capitalization Index 7 D + 50% Euro Stoxx 50 NR EUR: +11.10%).
- I unit
- N unit

| Performances since inception | Performances 2021 |
| --- | --- |
| +17.55% | +13.99% |

Classification: Hybrid fund (ECB category)
Management objective: The management objective is to outperform the reference indicator (50% of which is composed of the EONIA Capitalization Index 7 D (Bloomberg Code OISEONIA) and 50% the EUROSTOXX 50 NR (EUR) calculated with net dividends reinvested (Bloomberg Code SX5T)) – and used only for comparison purposes and for the calculation of the outperformance fee that may be levied – over the minimum investment period of three years through a flexible distribution among the equity and interest rate markets, by taking an approach to environmental, social and governance (ESG) risks and opportunities. The management of the fund is fully discretionary.
This UCITS promotes environmental or social and governance criteria (ESG) but does not pursue a sustainable development goal. It may partly invest in assets with a sustainable goal, for example as defined by the European Union classification.

Translation (ENFR, 2021-12-31):
# RAPPORT DE GESTION ANNUEL au 31/12/2021
à la fois par la moindre dangerosité du variant Omicron par rapport au Delta et par le discours de
la Fed quant à l’inflation. En Europe la BCE a poursuivi sa politique monétaire accommodante.
En cohérence avec notre scénario de poursuite du boom économique en 2022, nous maintenons une opinion raisonnablement positive sur les actions à échéance fin d’année. Le rallye montre des signes de maturité, ce qui justifie une exposition modérée en absolu, mais la classe d’actifs reste attractive par rapport aux obligations. Nous identifions l’inflation comme principal scénario de risque et resterons vigilants quant à la réponse des banques centrales en termes de politique monétaire.
En 2021, Dorval Convictions (part I) enregistre une performance de +12,8% contre une hausse de
+11,1% pour son indice de référence (50% Euro Stoxx 50 NR et 50% Eonia capitalisé). Le taux d’exposition aux actions a été principalement dynamique au cours de l’année. Celui-ci a évolué dans une fourchette de 52% à 100% en fonction de la rapidité de la hausse des marchés financiers, des nouvelles sur l’évolution sanitaire (variants Delta et Omicron), de l’avancée des vaccinations et des tensions inflationnistes.
Portés par les campagnes de vaccinations et la reprise économique, les marchés financiers ont fortement progressé au cours des cinq premiers mois de l’année. Le taux d’exposition offensif et le biais plus cyclique du portefeuille ont principalement contribué à la bonne performance relative de Dorval Convictions au cours de la période. A partir de juin, dans un contexte d’inquiétudes liées au variant Delta et d’une possibilité de reconfinement mais aussi de craintes d’inflation dues aux goulets d’étranglement, les investisseurs ont procédé à une forte rotation sectorielle en faveur des grandes valeurs de croissance et à des prises de bénéfices sur les valeurs cycliques (industrielles, financières). Dans ce contexte, le taux d’exposition avait été réduit en prenant des bénéfices sur nos valeurs liées à la reprise de la consommation.
Au cours du second semestre, les marchés sont restés bien orientés, soutenus par les bonnes publications des résultats, des politiques monétaires toujours accommodantes et la dynamique des vaccinations en Europe. En novembre, l’apparition du variant Omicron a dans un premier temps fait brutalement baisser les marchés mais la moindre dangerosité de celui-ci et le taux élevé des vaccinations ont permis d’éviter un arrêt de l’activité.
La croissance mondiale va rester soutenue au cours des prochains mois et les entreprises devraient afficher de bons résultats 2021. Dans ce contexte, le taux d’exposition aux actions est resté proche de 100% en fin d’année. L’évolution de l’inflation et des politiques monétaires seront les principaux indicateurs à surveiller début 2022.