# ANNUAL MANAGEMENT REPORT at 12/31/2021
Portfolio Management, the Middle Office and Compliance each set out scores out of 20 for every financial intermediary and counterparty currently used over a period of 6 to 12 months from the date of the previous financial intermediary and counterparty selection committee meeting.
Following this period, another financial intermediary and counterparty selection committee meeting is held, where the various scores and their arithmetical average for each financial intermediary and counterparty are presented. These averages are used to divide financial intermediaries and counterparties into the three groups below and ascertain the new updated list of financial intermediaries and counterparties authorized by DORVAL ASSET MANAGEMENT:
- a group of brokers that are selected (average of 12/20 and over): DORVAL ASSET MANAGEMENT maintains these financial intermediaries and counterparties on its list;
- a group of brokers that are preselected/under observation (average of at least 8/20 but less than 12/20): DORVAL ASSET MANAGEMENT flags and monitors these financial intermediaries and counterparties;
- a group of brokers that are excluded (average of 8/20 and under): DORVAL ASSET MANAGEMENT removes them from its list of financial intermediaries and counterparties.

This list of authorized financial intermediaries and/or counterparties is made available to all staff at DORVAL ASSET MANAGEMENT.
During the year, a broker may undergo a trial period and join the list of authorized brokers via the following process.
The Head of Portfolio Management or a representative of Portfolio Management with prior approval from the Head of Portfolio Management sends an email to the Compliance, Internal Control and Risk department, stipulating:
- Name of intermediary
- Contact details i.e. name, email address, phone number
- Financial instruments involved
- Strategy in question
- Type of service offered (execution or research only, call, corporate access, conference)
- Reason for request
- Indication of annual cost of service (if available)
- Test periodThe financial intermediary and counterparty selection committee is in charge of managing the process for selecting and assessing these providers. It is chaired by DORVAL ASSET MANAGEMENT’s senior management and includes portfolio managers, analysts and a representative from the Compliance, Internal Control and Risk department.

This committee is responsible for:
Decisions taken during these committee meetings must be applied two weeks after they are held.
After the committee meeting, the new list of authorized financial intermediaries and counterparties is approved by management and sent to all portfolio managers and the Middle Office.
DORVAL ASSET MANAGEMENT takes all the necessary steps to ensure that orders are executed in the best interests of its clients while not compromising market integrity, by taking on board criteria related to price, liquidity and order execution times.
These provisions include procedures adapted to suit the type of financial instruments and hence the type of market on which they are traded. DORVAL ASSET MANAGEMENT therefore endeavors to select the best intermediary to execute orders on the markets for each order placed by Portfolio Management teams and strives to ensure the traceability of all features of its execution.
DORVAL ASSET MANAGEMENT’s set-up is based on the best selection of financial intermediaries and is designed to ensure that orders placed are sent to regulated reference markets or multilateral trading facilities, depending on the best execution conditions available.
DORVAL ASSET MANAGEMENT therefore periodically monitors the conditions for execution of orders issued by portfolio managers, and regularly assesses the quality of this arrangement as part of the controls outlined in procedure DORVAL-proc.017 “Selection and assessment of financial intermediaries and counterparties”.
The overall risk on financial contracts is calculated using the commitment approach.
The Fund’s investment policy incorporates non-financial criteria related to the Environment, Social and Governance quality aspects (E.S.G). Dorval Asset Management also applies an exclusion policy to all its collective management operations.
Dorval Asset Management’s ESG policy can be viewed on our website: https://www.dorval-am.com/en_FR/our-esg-approach

## Efficient portfolio management techniques
At the date of financial year end, the Fund did not use efficient portfolio management techniques.

## Financial derivative instruments
At the date of financial year end, the Fund did not use financial derivative instruments.
Dorval Asset Management is an asset management company, accredited by the French financial markets authority (Autorité des marchés financiers) or AMF on June 15, 1993, and registered under number GP 93-008. It primarily manages UCITS funds and to a lesser extent AIFs (with assets under management below the thresholds set by the AIFM directive).
This “Remuneration Policy” aims to outline the Remuneration Policy as applied at Dorval Asset Management on the one hand, and on the other hand comply with documentation and disclosure requirements set out in European Directive 2014/91/EU (UCITS V Directive) in light of the company’s status as an asset manager, and in European Directive 2011/61/EU (AIFM Directive) in view of application of the AIFM lighter regime.
This policy consists of general principles that apply to all staff, specific principles that apply to specific staff categories identified under UCITS V, and a governance set-up that applies to all employees.
Dorval Asset Management complies with the directives and guidelines from the European Securities and Markets Authority (ESMA) published on February 11, 2013, and March 31, 2016, in a way and to an extent that are appropriate in view of its size and inhouse organization, as well as the type, scope and complexity of its businesses.
This policy is part of the broader Remuneration Policy defined by Natixis.
The Remuneration Policy is a strategic component of Dorval Asset Management’s policy. It acts as a tool for both mobilizing and engaging staff, and ensures competitiveness and attractiveness as compared with market practices, while also guaranteeing strict financial balance and compliance with regulation. It also includes an incentive mechanism to retain key staff via the potential allocation of free shares.
Dorval Asset Management’s Remuneration Policy applies to all staff and one of its fundamental
principles is the alignment of staff and investor interests:
- the policy is consistent and promotes sound and effective risk management, and does not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the products managed;
- the policy complies with the business strategy, objectives, values and interests of the Management Company and the products it manages, and investors in such products, and includes measures to avoid conflicts of interest.

manages, as well as individual performance. It factors in both quantitative and qualitative aspects, which can be assessed on an annual or multi-annual basis in order to manage the weighting of strictly financial or temporary performance.
The objective and transparent assessment of annual and multi-annual performance based on pre- defined objectives is a prerequisite for applying Dorval Asset Management’s Remuneration Policy, ensuring the fair and selective treatment of employees. This assessment is discussed by the employee and his/her manager during an individual performance review.
Each employee's contribution and performance are assessed on the basis of his/her position, assignments and level of responsibility at the Management Company. In this respect, the Remuneration Policy distinguishes between several categories of employee:
- Executives are assessed by reference to their contribution to the definition and implementation of the Management Company's strategy and their ability to develop the performances of its product and service ranges, as well as the risk-adjusted financial performance for their supervision scope. Performance is therefore assessed on the basis of the company’s key financial indicators (company’s pre-tax profit) as well as the quality of management and/or responsibility/contribution to cross-business projects.
- Support functions are assessed on their ability to support the Management Company in its strategic challenges. Individual performance is assessed on a yearly basis by reference to the quality of recurring assignments and/or the degree of participation in cross-business projects or strategic/regulatory projects.
- The performance of portfolio management functions is assessed on the basis of quantitative criteria, along with qualitative aspects. Quantitative criteria reflect the challenges of developing the management performance sought by investors, while not allowing excessive risk-taking that may have an impact on Dorval Asset Management’s risk profile and/or that of the products it manages.

Performances for portfolio management roles are thus assessed using a score derived from annual and multi-annual performances for funds and mandates. A collective and/or individual
4 In the overall document, individual variable remuneration, whether vesting and payment are immediate or deferred, equates to the idea of performance bonus.
This collective and/or individual score is used as the basis for the quantitative component of portfolio managers’ individual variable remuneration, which is then rounded out by a qualitative component. Criteria used for the qualitative component are set on a yearly basis, and for example include contribution to increasing the reliability of an investment process, client satisfaction, inflows for funds managed, participation in a cross-business project, support for the development of new expertise, contribution to the development of business efficiency and any other aspects set out in relation to Dorval Asset Management’s strategic goals.
Specific criteria incorporating sustainability risks and sustainable investment goals – social, environmental and governance aspects – must be set for all portfolio management staff
- Variable remuneration for Compliance, Internal Control and Risk staff is set independently of the businesses whose operations they are tasked with reviewing and controlling.

Variable remuneration for staff in charge of Compliance, Internal Control and Risk is set by Dorval Asset Management’s senior management as part of the overall budget, and on the basis of staff’s achievement of objectives, as assessed by their line manager following an individual annual performance review. The variable remuneration system for Compliance, Internal Control and Risk staff is based on qualitative objectives – e.g. team or project management, development of team cohesion, reporting quality, compliance with regulatory, ethics and internal control standards – and is in no way directly related to the performances of staff controlled or profits from the business controlled.
Performance assessment includes qualitative criteria for all staff categories: these criteria consistently include following regulation and company inhouse procedures on risk management and fulfilment of compliance requirements at Dorval Asset Management.
All quantitative and qualitative goals for each staff category are set out and announced individually at the start of the year.
The Remuneration Policy covers all aspects of remuneration. It distinguishes between fixed salary, based on an assessment of the skills required for the role, and variable remuneration, which is based on an assessment of certain defined individual and/or collective performance criteria.
Dorval Asset Management shall maintain a level of fixed remuneration that sufficiently remunerates employees for their work.
Fixed remuneration remunerates the skills, professional experience and degree of responsibility expected in any given position.
The position of fixed remuneration is reviewed periodically to ensure that it is consistent with geographical and professional market practices.
Fixed salaries are reviewed once a year as part of the annual compensation review. Outside that period, only promotions, internal job moves or exceptional changes to individual circumstances may lead to a review.
Variable remuneration budgets are defined on the basis of Dorval Asset Management’s annual results, as well as qualitative elements, such as the practices of competitor companies, general market conditions at the time the results were obtained and any factors that may have temporarily influenced the business line's performance.
Variable remuneration, where awarded, is paid to reward an annual collective and/or individual performance achieved. Total variable remuneration (including employer contributions) paid to staff and managers is capped at a percentage of the accounting result for the year, before tax and variable compensation including social levies. This percentage is approved by the Management Company’s board of directors.

## Collective variable remuneration
Dorval Asset Management’s collective variable remuneration consists of a profit-sharing scheme, together with a company savings plan (French plan d’épargne entreprise, PEE).
This collective variable remuneration has no incentive impact on risk management at Dorval Asset Management and/or the products it manages and does not fall within the scope of the AIFM or UCITS V directives.

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.