# ANNUAL MANAGEMENT REPORT at 12/31/2021
Mutual fund (French Fonds Commun de Placement or FCP)
Category: 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)) – 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.
- Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial servicessector (SFDR):In its capacity as a financial market participant, the UCI’s investment manager must comply with Regulation 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (Disclosure regulation or SFDR). This regulation sets out a standardized set of rules that apply to financial markets stakeholders on transparency on the integration of sustainability risks (article 6 of the Regulation), incorporation of adverse sustainability impacts, promoting environmental and social features in the investment process (article 8 of the Regulation) and sustainable investment goals (article 9 of the Regulation).

This UCI is categorized as Article 8 under this classification.
- Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (known as Taxonomy regulation):European Regulation 2020/852 known as Taxonomy regulation sets criteria to determine if an economic activity is sustainable from an environmental standpoint within the European Union. Under this regulation, an economic activity shall qualify as environmentally sustainable where it contributes substantially to one of the six environmental objectives set out under this regulation such as for example climate change mitigation, climate change adaptation, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems.

Additionally, this economic activity must adhere to the principle of “do no significant harm”
(DNSH) to one of the five other objectives in the Taxonomy regulation; it must also be consistent
The principle of do no significant harm as defined by Regulation (EU) 2020/852 does not apply to investments underlying this financial product.
Reference indicator: 50% EONIA Capitalization Index 7 D (Bloomberg code: OISEONIA) and 50% Euro Stoxx 50 NR (EUR) index (Bloomberg code: SX5T), calculated with net dividends reinvested (from January 1, 2013).
Risk profile: Generally, the net asset value could encounter high volatility due to the securities comprising its portfolio. However, the goal of the management strategy is to maintain an overall level of volatility that is on average lower than that of the equity markets. Investors are reminded that the composition of the portfolio may differ significantly from that of its reference indicator, and that the Fund is managed on a fully discretionary basis: as such, the Fund’s performance may be significantly higher or lower than that of its reference indicator.
Net assets of the fund at 12/31/2021: €226,152,810.62
| 12/31/2021 | R unit (FR0010557967) | I unit (FR0010565457) | N unit (FR0013299187) | Q unit (FR0013392222) |
| --- | --- | --- | --- | --- |
| NAV | €156.47 | €1,745.82 | €96.19 | €117.55 |
| Number of units | 1,194,180.865 | 18,243.523 | 76,468.145 | 765.416 |
| Net assets | €186,856,824.57 | €31,849,965.99 | €7,356,039.2 | €89,980.86 |

Valuation: daily – Inception date: 12/31/2007
These various aspects prompted positioning on assets that could best benefit from moves to open economies again.
In the second quarter, massive support along with investor risk appetite considerably pushed up valuations on the equity markets, yet demanding valuations did seem to fit with the overall environment comprising an economic recovery and negative real rates. However, after more than a year of robust recovery, investors were no longer surprised by the pace of the economic recovery, which was now broadly priced in. Additionally, a number of factors dampened activity again, including the Delta variant and bottlenecks. However, beyond these short-term uncertainties, belief in continued fundamentally positive momentum should win out, driven by widespread vaccination, the gradual easing in supply constraints, the exceptional financial situation for western households and public investment programs.
In this environment, Dorval Asset Management focused on themes related to the extension of growth (small- and mid-caps, sector diversification), companies and industries that fit with the “more and better” approach of green stimulus programs, and stocks that still harbored potential to benefit from an eventually Covid-free world i.e. tourism, banks, etc.
In the third quarter of the year, the markets initially stuck to their uptrend on the back of encouraging corporate earnings reports, which outstripped analysts’ projections, and ongoing vaccination programs. Lastly, continued low interest rates and the announcement of very gradual monetary policy tightening from the central banks acted to prop up the market. However, in September, the shock on energy prices, fears of a massive default in the Chinese real estate sector, and tension on interest rates combined to spark concerns on growth again. In this context, investors took profits particularly on shares exposed to the economic cycle and well-valued visible growth stocks, with few sectors spared.
In the fourth quarter, concerns on the Omicron variant and the Fed’s U-turn on the less ‘transitory’ nature of inflation failed to dampen fervor on the international stock-markets, as they ended the year close to fresh record highs. Investors were reassured on the one hand by the Omicron variant’s lesser severity than Delta and on the other hand by the Fed’s stance on inflation. Meanwhile in Europe, the ECB pursued its monetary policy accommodation.
In keeping with our scenario for a continuation in the economic boom in 2022, we maintained our upbeat stance on equities as the end of the year approached. The rally was showing signs of maturity and this merited moderate exposure in absolute terms, but the asset class remained

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.