# ANNUAL MANAGEMENT REPORT at 12/31/2021
- Cash borrowings:Cash borrowings may not represent more than 10% of the assets and serve, occasionally, to ensure liquidity for holders wishing to redeem their units without penalizing the overall management of assets.
- Temporary purchases and sales of securities: None.
- Contracts providing financial guarantees: None.
- Leverage:The Fund has leverage of up to 2.

Your money will be mainly invested in financial instruments selected by the Management Company. The Mutual Investment Fund’s risk profile is compatible with an investment horizon of more than three years. These instruments will be subject to the trends and fluctuations of the financial markets of the eurozone. The risks to which unitholders are exposed through the fund are primarily as follows:

## Capital risk:
The portfolio is managed on a discretionary basis, and does not benefit from any guarantee or protection for the capital invested. A capital loss occurs when a unit is sold at a price that is lower than its purchase price.

## Discretionary management risk:
Discretionary management is based on anticipating trends in the financial markets. The Fund's performance will depend on the companies selected and the asset allocation defined by the Management Company. There is a risk that the Management Company may not select the best- performing companies.

## Equity risk:
The Fund’s net asset value may vary upward or downward given that a large proportion of the portfolio is invested in equity markets. Due to its management strategy, the Fund is exposed in particular to small- and mid-cap companies which, as a result of their specific characteristics, may have a liquidity risk due to the potentially illiquid nature of their market and fall further than large- caps in periods of stress.

## Risk related to capitalization size:
Due to its management strategy, the Fund is exposed in particular to one or several equity markets involving small- and mid-cap companies. The volume of these securities listed on the stock-market
Exchange rate risk is related to exposure, via investments and by trades in futures and options, in a currency other than that of the Fund’s valuation. Currency fluctuations with respect to the euro may have a positive or negative effect on the Fund’s net asset value.
Unitholders residing in the eurozone may have to bear this currency risk, subject to a limit of 40% of the portfolio.

## Interest rate risk:
Interest rate risk results in a decrease in the net asset value in the event of changes in interest rates. When the sensitivity of the portfolio is positive, an increase in interest rates may lead to a fall in the value of the portfolio. When the sensitivity is negative, a fall in interest rates may lead to a fall in the value of the portfolio.

## Credit risk:
Credit risk is the risk that an issuer cannot meet its commitments. In the event of a deterioration in the quality of the issuers, such as their rating by the financial rating agencies, the value of the bonds may fall and cause the Fund's net asset value to fall.

## Risk of investing in emerging markets:
The Fund may invest up to 10% of its assets in equities from emerging countries in Eastern Europe, Latin America and Asia. Investors are reminded that operating and supervisory conditions in some of the above markets may fall short of the standards prevailing on major international stock- markets.

## Sustainability risk:
This UCITS is subject to sustainability risks as defined in article 2(22) of Regulation (EU) 2019/2088 on sustainability-related financial disclosures in the financial services sector (known as SFDR), by an environmental, social or governance risk or event that, if it occurs, could cause a real or potential negative material impact on the value of the investment. The portfolio’s investment process includes the ESG approach mentioned above with a view to incorporating sustainability risks into the investment decision or process. The sustainability risk management policy is available on the Management Company’s website.
Apart from this exception, the units of the Fund are defined as:
- R units: all subscribers.
- I units: strictly reserved for institutional investors or eligible counterparties defined by the Management Company.
- M units: reserved for feeder UCI managed by the Management Company or a company in the Group.
- N units: subscriptions of this unit are reserved for investors subscribing via distributors or intermediaries:
	- Subject to national legislation prohibiting all retrocessions to distributors (e.g. in the United Kingdom and the Netherlands)or

- Providing:
	- an independent advisory service as defined by the European MiFID II regulation;
	- individual portfolio management services under mandate.

- Q units: reserved for Dorval Asset Management funds or Dorval Asset Management employees.

This Fund is intended for subscribers wishing to enhance their capital, via a vehicle that invests flexibly in equities and interest rate products, targeting an outperformance of the reference indicator over a minimum period of three years.
The appropriate amount to invest in this Fund depends on each investor’s personal situation. To determine this amount, investors should consider their personal assets, their current financial needs and the investment period, as well as the extent to which they are prepared to take risks or not.
Investors are strongly advised to seek professional advice in order to sufficiently diversify all their investments and decide the proportion of their financial portfolio or assets to invest in this Fund. Investors are also advised to sufficiently diversify their investments to ensure that they are not exposed solely to the risks of one single UCITS.
Pursuant to Articles L533-16 and R533-22 of the French Monetary and Financial Code, the information and report on the voting policy are available on the website of the Management Company and/or at the registered office.
Dorval Asset Management is not a market member and therefore does not execute orders on the financial markets on its own behalf, but rather systematically passes on orders to accredited market intermediaries for execution. In light of this, the company has set up a market intermediary selection and execution policy, pursuant to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, known as MiFID II.
DORVAL ASSET MANAGEMENT will take all reasonable steps to obtain the best possible result for all portfolios managed (UCITS and management mandates) during order execution, pursuant to measures set out in the French Monetary and Financial Code.
At this stage, we place orders relative to the UCITS and mandates we manage via a network of intermediaries.
DORVAL ASSET MANAGEMENT can only select a financial intermediary if a legal agreement complying with current regulation has been signed with it.
Pursuant to applicable regulation, DORVAL ASSET MANAGEMENT has set up a program to select market intermediaries that differs depending on the type of relationship between DORVAL ASSET MANAGEMENT and the counterparty. DORVAL ASSET MANAGEMENT relies on market intermediaries for execution services and research services, while other brokers provide only execution services.

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.