FCP RAYMOND JAMES EUROPE PLUS SEPTEMBER 2020 MACROECONOMIC REVIEW September was marked by the return of risk aversion in the financial markets. The epidemic continues to INVESTMENT PROCESS spread around the world with a record that continues to deteriorate leading to a slight drop in the equity markets over the period: STOXX 600 -1.41%, CAC 40 -2.76% and S&P 500 - 2.02%. In Europe, the downside risks are still very present. On the health front, the epidemic is rebounding and the constraints are Raymond James Asset Management International’s European tightening, including localized lockdowns. On the budgetary front, governments are stepping up measures Equities management team uses an original investment process that consists in identifying global macroeconomic to support activity. The hundred billion euro plan announced in France aims to support short-term catalysts and translating them into 3 or 4 major investment employment and demand as well as longer-term productive investment. In terms of monetary policy, the themes. These themes are approved by a quarterly ECB is also confirming its support measures. Christine Lagarde thus linked the end of the special asset Macroeconomic Committee, attended by academic purchase program with an upturn in inflation. The idea that the latter may temporarily exceed two percent economists and strategists, fund managers and financial is no longer excluded, as the FED announced a few weeks ago. However, the appreciation of the euro analysts. Once the structural or cyclical themes have been identified, our portfolio managers select stocks that against the dollar will have to be watched as it could penalize the zone's exports. Moreover, "Brexit" has correspond to the chosen themes, whilst using fundamental once again entered the debates, with the questioning of the original exit agreement by Boris Johnson. company analysis. Negotiations between the British government and the European Commission could extend further over An enhancement of the investment process is set up since end time, which would constitute an additional stressor for the markets. In the United States, negotiations for a of February 2019: it includes a quantitative filtering of the new fiscal stimulus package are not progressing much. Disagreements persist between the two parties, in stocks before the fundamental selection (upon two defensive particular regarding the amount of aid to be allocated. To date, Democrats would like $ 2.2 trillion, while criteria, Low Volatility & Low Beta, and a performance criteria, Momentum), as well as the portfolio construction and Republicans remain stuck at "only" $ 1.3 trillion. This situation could weigh on consumer spending in the monitoring based on risk budgeting. fourth quarter, which was also penalized by the still too slow improvement in the labor market. The deterioration of the health situation should force some states to implement new restrictions and thus further delay the resumption of activity. In this context, the Fed has indicated that it does not anticipate any inflation likely to require an increase in its rates before at least 2023. The central bank has also revised its growth outlook upwards and envisages a decline in US GDP of -3.7% in 2020 against -6.5% expected in June. GENERAL INFORMATION Finally, in addition to trade tensions with China, the upcoming elections could lead to a marked return of volatility in the equity markets. Recent polls show an increase of Donald Trump, especially in the "swing Custodian Société Générale states" which will be crucial to decide between the two candidates. Cut off Subscriptions/redemptions are centralized daily at 12.00 at Société Générale PERFORMANCES & STATISTICS AS OF 30 OF SEPTEMBER 2020 ISIN (Ashare) FR0010178665 ISIN (I share) FR0010182352 160 +52,4% RJ Europe Plus (I Share) - base 100 Classification AMF EU member countries equities 150 Benchmark Stoxx Europe 600 NR Benchmark (TR)– base 100 NAV calculation Daily 140 Management fees +23,4% A share 2.316% of net assets 130 I share 0.96% of netassets Entry fees 2%max 120 Exit fees None NAV (Ashare) 3 4 3 , 55 € 110 NAV (Ishare) 170 921,10 € 100 Inception date (A share) June, 3 2005 Inception date (I share) April, 11 2007 90 Net assets 26,49 M€ 12/14 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 06/19 12/19 06/20 1 m 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Inception INVESTMENT OBJECTIVE A share -0,4% 4,7% 22,0% -14,3% 9,6% -0,2% 17,7% -4,5% 19,3% 22,3% -10,0% 15,6% 32,2% -43,9% 129,03% Stoxx 600 -1,5% -13,2% 23,2% -13,2% 7,7% -1,2% 6,8% 4,3% 17,3% 14,3% -11,3% 8,6% 28,0% -45,6% 33,61% Outperform its benchmark, the Stoxx Europe 600 NR index, on a 5-yr investment horizon. The fund is mainly invested in Stoxx 600 TR -1,4% -11,6% 26,8% -10,8% 10,6% 1,7% 9,6% 7,2% 20,7% 18,1% -8,6% 11,6% 32,4% -43,7% 105,16% large cap stocks in Europe. I share -0,3% 5,7% 23,7% -13,1% 11,1% 1,1% 19,4% -3,2% 20,9% 24,0% -8,7% 17,1% 32,9% -43,3% 70,92% Stoxx 600 23,2% -13,2% 7,7% -1,2% 6,8% 4,3% 17,3% 14,3% -11,3% 8,6% 27,9% -45,6% -5,52% RISK EXPOSURE -1,5% -13,2% Stoxx 600 TR -1,4% -11,6% 26,8% -10,8% 10,6% 1,7% 9,6% 7,2% 20,7% 18,1% -8,6% 11,6% 32,3% -43,7% 39,46% Low risk High risk 1 2 3 4 5 6 7 MANAGEMENT REVIEW This month, we arbitrated our position in LVMH for Christian Dior. The latter has significantly underperformed LVMH since the start of the year (-21% vs. -4.5%). Over this period, Christian Dior's L’EQUIPE DE GESTION discount on its NAV, including 41% of LVMH shares, fell from nearly 8% to 25%, i.e. a historically high level. Louis de FELS - Edwin FAURE We also strengthened in Galenica and Interroll stocks. The Swiss supplier of medicines to pharmacies, Hugo VOILLAUME - Guillaume BUHOURS Galenica, revised its objectives for the year 2020 with a revenue growth target raised by 2pts but a margin target lowered to the level of 2019. We considered the stock drop unjustified regards to company's resilience in the face of economic cycles. The Swiss warehouse automation specialist Interroll also demonstrated its resilience in the first half of the year. Despite a 10% drop in revenue, EBIT grew and the company has gained significant market share against weakened competitors. Regarding disposals, we reduced our Deutsche Boerse position following a very good stock market 45 Avenue George V 75008 PARIS performance (+ 60% since mid-March), because we believe that the exceptional volumes on derivatives 33 (0) 1 45 61 64 90 linked to the period of covid-19 will not recur in the second semester. We also reduced our Kerry position www.rjami.com in order to respect our risk budget process. FCP RAYMOND JAMES EUROPE PLUS SEPTEMBER 2020 RISK INDICATORS (A Share)* KEY RATIOS 3 years Investment ratio 92,68% Volatility 17,3% Number of lines 49 Stoxx 600 Volatility 19,9% Monthly Perf (A Share) -0,38% Beta 0,9 Monthly Perf (I Share) -0,26% Sharpe Ratio 0,7 PER 2020 RJE+* 27,3 1Y Tracking Error 9,4 * Bloomberg data * ex. real estate TOP FIVE POSITIONS CONTRIBUTIONS TO MONTHLY PERFORMANCE Name % Net assets Best contribution Perf/month Contrib/month AIR LIQUIDE 5,1% SOMFY SA 15,1% 0,33% NOVO NORDISK A/S-B 4,4% NOVO NORDISK A/S-B 6,3% 0,27% ORSTED A/S 3,3% INSTALCO AB 17,5% 0,26% GIVAUDAN-REG 3,1% GIVAUDAN-REG 4,7% 0,14% EDP RENOVAVEIS SA 3,1% NEXI SPA 14,8% 0,14% Worst contribution ARGAN -5,8% -0,16% BREAKDOWN BY MARKET CAPS ALSTOM -8,8% -0,16% ESKER SA -4,8% -0,14% Over €5 Bn 58,7% AIR LIQUIDE SA -2,6% -0,12% From €1 to €5 Bn 30,4% EDENRED -11,3% -0,12% Less then 1€ Bn 10,9% Average capitalisation (M€) 28 743,7 COUNTRY BREAKDOWN (on total invested) 7 152,9 Median capitalisation (M€) 50% 41% RJ Europe + 43% 40% Stoxx 600 30% CARBON FOOTPRINT 2018 (as of Dec. 31, 2017) 17% 20% 15% 15% 15% Portfolio CO2 Emissions RJ Europe Plus: 11 803 to. 8% 9% 8% 7% 4% 10% 4% vs. index Stoxx 600: 19 588to. 3% 4% 0% Scope 1 and 2 data Others Spain Switzerland United Germany France Italy Kingdom (as addition of direct and indirect emissions, in tonnes) INDUSTRY BREAKDOWN (on total invested) Personal & Household Goods Carbon Intensity (in to. CO2 eq / € Mln): 3,2% 1,0% Insurance 4,5% Revenues Mkt.Value Industrial Goods & Services 13,2% RJ Europe Plus: 178,0 273,6 Real Estate 21,2% 3,1% Stoxx 600 214,2 365,0 Chemicals Utilities 3,1% The improvement in performance is mainly due to the allocation effect (-10% Oil & Gas in 2017) and also to the stock picking (-6,9% in 2017). Health Care 2,3% 3,1% Construction & Materials Source: Rating by GRIZZLY Responsible Investments http://grizzly-ri.com Financial Services 6,8% Retail 1,0% 13,6% Technology 18,0% Telecommunications Automobiles & Parts NOTICE The figures given relate to previous years. The Fund’s performances and the indexes are calculated with dividends and coupons reinvested net of fees.