Q2 2026 Fund Commentary

Commentary and opinions are provided by Keyridge Asset Management.

Market commentary

International equities performed positively over the quarter ended June 30, 2026. Returns were driven by a global rally in information technology sector stocks, while European markets were especially strong as geopolitical tensions eased.

Performance

The Fund’s objective is to target 5% annual income comprised of option premiums and dividends from the underlying equity. The Fund has a holding in iShares MSCI EAFE ETF for equity market exposure, and the option overlay systematically rolls between derivatives contracts every week.

The Fund’s call option overlay detracted from performance over the quarter. The sub-advisor sells away a portion of the Fund’s equity market upside exposure through call options, which helps the Fund achieve its income generation target but detracts from performance relative to its equity benchmark when the equity market moves upward.

Portfolio activity

Each week, the sub-advisor trades one-month call options in a systematic manner, which involves closing expired option contracts and selling new ones. This call option overlay helps the Fund achieve its income generation target.

The sub-advisor can also increase or decrease the option positions to maintain the notional exposure within a target range. This is done to manage the amount of upside exposure that’s exchanged for a premium.

Outlook

There has been no change to the strategic position of the Fund. The Fund aims to target 5% annual income comprised of option premiums and dividends from the underlying equity. Full equity exposure was maintained daily, and option notionals were monitored and maintained within the target range.