IQ-EQ Fund Performance Snapshot

Equity markets traded in a relatively narrow range during July, ending the month down 0.12% as measured by the MSCI World Index (net). The year-to-date return was 12.55% in euro terms at month end. Tensions in the Middle East continued to impact markets despite a memorandum of understanding signed by the US and Iran on 17 June , which was intended to result in the opening of the Strait of Hormuz to shipping. However, Iranian attacks on vessels attempting to exit the Strait resulted in sustained US airstrikes on Iranian targets and subsequent retaliation by Iran on Gulf states.

The Energy sector was once again the major beneficiary of the ongoing conflict, with the Brent crude oil price breaching $100 on 23 July for the first time since late-May.

The Information Technology sector was the worst-performing sector during July as investors questioned the likely returns from the considerable ongoing investment in data centres. Microsoft and Apple, however, bucked the trend in the Technology sector, with the former posting very strong earnings late in the month.

At IQ-EQ Fund Management, we focus on profitable businesses which generate persistent returns and have high levels of protection combined with competent management. We define these as quality businesses, and we expect them to perform irrespective of market volatility. In the long run, we believe these characteristics will deliver outperformance for our clients.

July 2026 figures for the IQ-EQ range of Funds:

July 2026

IQ EQ Global Equity Income Fund: July Ret. -1.05%, YTD 20.04% (Net of fees)

The IQ EQ Global Equity Income Fund returned -1.05% compared with the MSCI World, which fell by 0.12%. Stock Selection and Sector Allocation effects were negative contributors to relative performance, while Currency Effects were a positive contributor. The Stock Selection outcome was driven by holdings such as Corning and Intel. The contribution from Sector Allocation was due to the underweight position in the Energy sector and overweight position in Industrials. The underweight in Information Technology contributed positively to Sector Allocation.

Key contributors during the period include:

+ Paychex, Inc. (PAYX) provides a comprehensive suite of expert-enabled technology and advisory solutions that help businesses manage HR, payroll, and benefits, serving approximately 800,000 clients across the United States. In 2026, PAYX shares spent much of the first half under pressure, before July's sharp recovery lifted the YTD total return to 7.3% in euro terms. The stock gained 20% over July, supported by improving investor sentiment around the company's growth outlook. Early in the month, the company released a report confirming full-year revenue of $6.5 billion, up 17% YoY, and adjusted diluted EPS of $5.51, up 11% YoY. Mid-month, the board declared a quarterly cash dividend of $1.19 per share, payable August 28th. Analysts raised their average price target during the month as the market cooled on the AI trade and sought value in shares that had been seen as potential victims of the development and implementation of AI tools. Though the stock fell 6.4% on July 30th, its steepest single-day decline in over a year, suggesting profit-taking despite the positive analyst revisions. Organic growth is accelerating to 6%, exiting FY2026 from 3% a year prior and recently acquired Paycor synergies are beginning to contribute to earnings.

+ Automatic Data Processing (ADP) is a global provider of human capital management solutions, offering payroll processing, HR software, and workforce management services to businesses of all sizes. The company operates through two primary segments: Employer Services and Professional Employer Organisation (PEO) Services. After a difficult first half in which shares fell approximately 13% from their year-end 2025 close, ADP recovered sharply in July to finish the year to date up approximately 5%. The stock gained approximately 19.0% over the month, supported by a series of analyst price target upgrades early and mid-month, with analysts citing stable employment trends and expectations of a broadly in-line earnings print. On July 29th, ADP reported Q4 FY2026 adjusted EPS of $2.64 and revenue of $5.474 billion, both ahead of consensus, capping a fiscal year in which revenue grew 6.8% and EPS expanded 16.5% YoY, with Employer Services bookings up 6% and client retention reaching a record 92.1%. ADP guided for revenue growth of 5–6% and adjusted EPS growth of 9–11%, broadly in line with consensus, with 70–90 basis points of adjusted operating margin expansion anticipated. With record client retention, AI-driven productivity gains, and a resilient float income tailwind, ADP appears well-positioned to sustain earnings growth despite a moderating employment backdrop.

- Corning Inc. (GLW) is a world-leading innovator in materials science, specialising in glass, ceramics, and optical physics, with key business segments spanning Optical Communications, Display Technologies, Specialty Materials, Environmental Technologies, and Life Sciences. The company's Optical Communications division has emerged as a primary growth engine, driven by surging demand for AI data-centre infrastructure. Shares entered July having surged over 200% year-to-date, underpinned by robust AI-infrastructure demand for optical connectivity products. On July 28th, Corning reported Q2 core sales of $4.74 billion, up 17% YoY, with adjusted EPS of $0.78 beating the $0.76 consensus estimate, as enterprise optical revenue surged 65% YoY driven by AI data-centre demand. Despite the earnings beat, Q3 revenue guidance of $4.9–$5.0 billion came in slightly below the $5.0 billion consensus, with management citing manufacturing capacity constraints, triggering a sell-off of approximately 20% on the day — the largest single-day decline since 2002 — and leaving the stock down approximately 46% over the month. Consensus earnings forecasts fell to $197 from $219 pre-earnings. Management guided Q3 core EPS of $0.85–$0.89, representing approximately 28% YoY growth, and reaffirmed its Springboard plan targeting $20 billion in annualised revenue by end of 2026, rising to $40 billion by 2030. Despite the sharp de-rating, Corning's AI-infrastructure demand remains structurally intact, and the company's ambitious longer-term revenue targets underpin a constructive fundamental outlook, contingent on successful capacity expansion.

- Intel (INTC) designs and manufactures microprocessors, chipsets, and related semiconductor products for computing, data centre, and AI applications, operating through its Client Computing, Data Centre & AI, and Intel Foundry segments. The company serves PC, server, and foundry markets globally, with a strategic focus on regaining manufacturing leadership through advanced process nodes. In 2026, Intel entered the year with exceptional momentum, with shares having surged approximately 278% in the first half to rank among the top performers in the S&P 500. Early in the month, Intel raised chip prices by up to $50 citing market dynamics, and mid-month announced a €5 billion expansion of its Irish manufacturing campus alongside confirmation that it had begun using ASML's most advanced High NA EUV equipment in production; a subsequent announcement of further headcount reductions at its data centre unit briefly lifted the stock by as much as 7.9%. On July 23rd, Intel reported Q2 2026 revenue of $16.1 billion, up 25% YoY and well ahead of consensus, with non-GAAP EPS of $0.42 versus an analyst estimate of approximately $0.27, driven by Data Centre & AI revenue growth of 59% YoY. Despite an initial post-earnings gain, a late-month sector-wide selloff on AI spending concerns and China competition pressures drove the stock to end July down sharply. Management guided Q3 2026 revenue to $15.8–$16.8 billion with adjusted EPS of $0.38, both materially above analyst expectations. Intel's turnaround trajectory remains broadly intact, supported by improving manufacturing execution and AI-driven server CPU demand.

IQ EQ Strategic: Global Quality Equity Fund*: July Ret. 0.64% , YTD 11.44% (Net of fees)

The IQ EQ Strategic: Global Quality Equity Fund returned 0.64% over the month, compared with the MSCI World Index, which returned -0.12%. The Fund's outperformance was driven by Stock Selection, while Sector Allocation was a detractor. Currency Effects had negligible impact. The negative Sector Allocation outturn was driven primarily by overweight positioning in Information Technology and underweight positioning in Energy. Health Care was the Fund’s best performing sector. The positive contribution from Stock Selection was due to the strong performance of stocks such as Microsoft and Capcom.

Key contributors during the period include:

+ Microsoft (MSFT) is a global technology company that develops, licenses, and supports software, services, devices, and solutions across cloud computing, productivity, and gaming. Its principal offerings include the Azure cloud platform, Microsoft 365 productivity suite, LinkedIn, and Xbox gaming services. In 2026, the company's shares endured a difficult first half before recovering to post a YTD total return of -1.7% in euro terms. The stock gained 23.5% over the month, with a significant portion of the advance concentrated in the final trading days. Early in the month, Xbox announced the elimination of approximately 3,200 roles — around 20% of its workforce — and the divestiture of several game studios as the division sought to address structural challenges, while Microsoft separately began replacing third-party AI models with its own internally built MAI models in key productivity applications to reduce costs. Mid-month, the company committed a multibillion-dollar investment in a GPU infrastructure pact with Mistral, expanding its AI and cloud services delivery capacity. On July 29th, Microsoft reported Q4 FY2026 results, with revenue of $90.0 billion, up 18% YoY and ahead of consensus, driven by Azure cloud growth of 43% in constant currency — the fastest pace since 2022 — and M365 Copilot surpassing 30 million paid seats; analysts subsequently raised their earnings expectations. Management guided Azure growth of approximately 45% in constant currency for Q1 FY27, with FY27 operating margins expected to decline by less than 100 basis points despite continued AI investment. With cloud demand continuing to outpace available capacity and Copilot adoption accelerating, Microsoft appears well-positioned to sustain high-teens revenue growth and deliver meaningful earnings expansion in the year ahead.

+ Capcom Co Ltd (9697) is a Japanese producer and distributor of computer games with franchises including Resident Evil, Street Fighter, and Monster Hunter. It also develops and leases arcade game machines. In 2026, Capcom benefited from strong catalogue sales and the April launch of Pragmata, though shares entered July down YTD. Early in the month, shares rose 7% on news that Onimusha: Way of the Sword was brought forward to September 4th. However, US gaming data showing a 21% YoY decline weighed on the sector. Quarterly earnings results, released during the month, showed operating income +67% YoY, well ahead of analyst consensus, with net sales of +55% YoY. As a result, the stock surged 20%, lifting the monthly return to c. 32%. Robust catalogue momentum and a strong new title pipeline position Capcom well for continued growth.

- KLA Corp (KLAC) is the global leader in process control equipment for semiconductor manufacturing. The company offers wafer inspection and semiconductor assembly solutions, with Semiconductor Process Control as its top revenue-generating product line. In 2026, KLAC shares rose approximately 51% year-to-date through July, though shares fell approximately 39% over July amid broad chip sector weakness. During the month, KLA reported Q4 FY2026 revenues and adjusted EPS both ahead of consensus, though free cash flow missed expectations. Management raised its 2026 WFE forecast to the low-$150 billion range and guided Q1 FY2027 revenue of $3.8–$4.2 billion. KLA remains well-positioned to benefit from rising chip complexity and AI infrastructure investment, underpinned by its leading market share in process control.

- Applied Materials (AMAT) provides materials engineering solutions — equipment, services, and software — for semiconductor chip manufacturing. Its tools are critical to etching, deposition, and inspection processes across logic, memory, and advanced packaging. Entering July, AMAT had more than doubled year-to-date on strong AI-driven equipment demand. Early in the month, shares surged c. 10% on Meta's plans to manufacture its in-house AI chip. Mid-month, a broad AI trade unwind fuelled by China chipmaking competition fears reversed those gains sharply. A brief rebound followed before renewed selling pressure closed the month with AMAT down c. 30%. The CEO highlighted customer demand visibility extending well beyond 2027. Despite the sharp pullback, AMAT's demand backdrop, anchored by AI infrastructure build-out and gate-all-around transitions, remains constructive.

IQ EQ Global Focus Fund: July Ret. -1.02% , YTD 6.69% (Net of fees)

The IQ EQ Global Focus Fund returned -1.02% during July. The equity portfolio returned -1.1% gross, while the bond portfolio returned -0.29%. Within the equity portfolio, holdings such as Microsoft and Corning were among the strongest contributors to performance during the month, while AI beneficiaries Corning and TSMC detracted from performance.

Key contributors during the period include:

- Taiwan Semiconductor Manufacturing Co. (TSM) is the world's largest dedicated independent semiconductor foundry, producing chips on behalf of leading technology companies — including Nvidia, Apple, and AMD — across a broad range of advanced process nodes. The company operates fabrication facilities in Taiwan, Japan, and the United States, with its leading-edge 3nm and 2nm processes central to the global AI hardware supply chain. In 2026, TSM entered the year with strong momentum, with the ADR rising approximately 57% over the first half to close June at $477.57, underpinned by surging AI-related chip demand. Early in the month, TSM distributed approximately $4.8 billion in fourth-quarter cash dividends, while a typhoon-related market closure in Taiwan briefly delayed the release of its monthly sales figures. Mid-month, TSM reported Q2 EPS of $4.31, beating the consensus estimate of $3.77 by 14%, with revenue of $40.2 billion rising 34% YoY and exceeding expectations; Q2 gross margin reached a record 67.7%, with advanced technologies accounting for 77% of wafer revenue. Despite the strong beat, the ADR fell approximately 15% over the month to close at $404.25, as investors rotated out of chip stocks amid concerns over the company's sharply elevated capital expenditure plans. Late in the month, a magnitude 7 earthquake struck the Kumamoto region of Japan, temporarily disrupting operations at TSMC's JASM fabrication facility, though structural inspections confirmed the building was safe and operations gradually resumed. Management raised its full-year 2026 revenue growth outlook to slightly above 40% in US dollar terms — up from a prior forecast of above 30% — and guided Q3 revenue to $44.6–$45.8 billion, above analyst consensus, with analysts broadly raising price targets following the results. Despite near-term headwinds from elevated capital intensity and the Kumamoto disruption, TSM's dominant foundry market position, record gross margins, and accelerating AI-driven demand support a constructive long-term outlook.

IQ EQ ESG Multi-Asset Fund: July Ret. 0.88% , YTD 2.76% (Total Return, net of fees)

Within the Equity Portfolio:

The IQ EQ ESG Multi-Asset Fund returned 0.88%, net of fees, during the month. The equity component, which accounts for approximately 61% of the strategy, returned +2.53% gross. This compares with the MSCI World Index return of -0.12%. The relative performance of the equity book was driven by positive contributions from Stock Selection, Sector Allocation and Currency Effects. Stock Selection was most positively impacted by Microsoft, while TSMC detracted most from Stock Selection. The positive Sector Allocation outturn for the month was driven by an overweight position in the Financials sector and an underweight position in the Information Technology sector. Currency Effects were a minor positive contributor to relative performance during the month.

Key contributors during the period include:

+ Microsoft (MSFT) is a global technology company that develops, licenses, and supports software, services, devices, and solutions across cloud computing, productivity, and gaming. Its principal offerings include the Azure cloud platform, Microsoft 365 productivity suite, LinkedIn, and Xbox gaming services. In 2026, the company's shares endured a difficult first half before recovering to post a YTD total return of -1.7% in euro terms. The stock gained 23.5% over the month, with a significant portion of the advance concentrated in the final trading days. Early in the month, Xbox announced the elimination of approximately 3,200 roles — around 20% of its workforce — and the divestiture of several game studios as the division sought to address structural challenges, while Microsoft separately began replacing third-party AI models with its own internally built MAI models in key productivity applications to reduce costs. Mid-month, the company committed a multibillion-dollar investment in a GPU infrastructure pact with Mistral, expanding its AI and cloud services delivery capacity. On July 29th, Microsoft reported Q4 FY2026 results, with revenue of $90.0 billion, up 18% YoY and ahead of consensus, driven by Azure cloud growth of 43% in constant currency — the fastest pace since 2022 — and M365 Copilot surpassing 30 million paid seats; analysts subsequently raised their earnings expectations. Management guided Azure growth of approximately 45% in constant currency for Q1 FY27, with FY27 operating margins expected to decline by less than 100 basis points despite continued AI investment. With cloud demand continuing to outpace available capacity and Copilot adoption accelerating, Microsoft appears well-positioned to sustain high-teens revenue growth and deliver meaningful earnings expansion in the year ahead.

- Taiwan Semiconductor Manufacturing Co. (TSM) is the world's largest dedicated independent semiconductor foundry, producing chips on behalf of leading technology companies — including Nvidia, Apple, and AMD — across a broad range of advanced process nodes. The company operates fabrication facilities in Taiwan, Japan, and the United States, with its leading-edge 3nm and 2nm processes central to the global AI hardware supply chain. In 2026, TSM entered the year with strong momentum, with the ADR rising approximately 57% over the first half to close June at $477.57, underpinned by surging AI-related chip demand. Early in the month, TSM distributed approximately $4.8 billion in fourth-quarter cash dividends, while a typhoon-related market closure in Taiwan briefly delayed the release of its monthly sales figures. Mid-month, TSM reported Q2 EPS of $4.31, beating the consensus estimate of $3.77 by 14%, with revenue of $40.2 billion rising 34% YoY and exceeding expectations; Q2 gross margin reached a record 67.7%, with advanced technologies accounting for 77% of wafer revenue. Despite the strong beat, the ADR fell approximately 15% over the month to close at $404.25, as investors rotated out of chip stocks amid concerns over the company's sharply elevated capital expenditure plans. Late in the month, a magnitude 7 earthquake struck the Kumamoto region of Japan, temporarily disrupting operations at TSMC's JASM fabrication facility, though structural inspections confirmed the building was safe and operations gradually resumed. Management raised its full-year 2026 revenue growth outlook to slightly above 40% in US dollar terms — up from a prior forecast of above 30% — and guided Q3 revenue to $44.6–$45.8 billion, above analyst consensus, with analysts broadly raising price targets following the results. Despite near-term headwinds from elevated capital intensity and the Kumamoto disruption, TSM's dominant foundry market position, record gross margins, and accelerating AI-driven demand support a constructive long-term outlook.

Within the Bond Portfolio:

The bond portfolio returned -1.51% in July, underperforming its benchmark, the JP Morgan Global Bond Index (unhedged in euros) which returned -1.23%.

Security selection and U.S. curve positioning contributed positively to performance. However, this was more than offset by Japanese yield curve strategy and, in addition, the portfolio’s long duration position in UK Gilts. Both underperformed as the ceasefire in the Middle East broke down and energy prices climbed higher.

Global bond markets were weak in July, with the JPMorgan Global Bond Index declining by -1.23% over the month. The primary driver was the re-escalation of tensions between the United States and Iran, which further disrupted shipping through the Strait of Hormuz and pushed energy prices higher. Rising energy costs raised concerns that inflation could remain elevated for longer than previously expected, prompting investors to demand higher yields on government bonds. As a result, bond yields increased and bond prices fell across developed markets.

IQ EQ Cash Fund: July Ret. 0.13%, YTD 0.83% (Net of fees)

The gross running yield on the Cash Fund at the end of July was 2.02% as the ECB continues to monitor inflation, European infrastructure spending as well as the impacts of geopolitical events such as conflict in the Middle East to the current cycle of monetary policy. The Fund Management team continue to maintain ca. 30% of the fund in short term liquidity & short-dated government bonds, blended with deposits termed out for different maturities out to a maximum of one year.

The ECB kept interest rates on hold in July, after the first-rate hike in June since 2023, but German bund yields reached levels not seen since 2011, with the market pricing in the next ECB hike for September. The accompanying statement noted that ‘the outlook for energy prices, while highly volatile, currently stands close to the baseline of the June Euro system staff projections’. ECB President Lagarde said that officials ‘were positioned adequately to wait and be very attentive in the next few weeks to the development of the situation and to the data that we will be receiving in the next few weeks’. Lagarde also stated that risks to the inflation outlook are to the upside, that energy shock could intensify further and its effects on other prices and wages could be stronger than currently expected and that the longer energy prices stay high, the more likely they are to drive up broader inflation.

ECB minutes for the June meeting, where officials unanimously raised rates for the first time since 2023, noted that given the continuing high uncertainty officials thought that it was important to refrain from providing guidance on the path of further interest rate moves and that ‘communication should remain neutral, neither suggesting that the current decision was the first in a sequence of hikes to come nor that it was a one-off move’. While markets are expecting another move in September, officials believe that ‘raising interest rates by 25bps at this time was consistent with the strategy of a measured adjustment of policy in response to a supply shock generating a large though not too persistent overshoot of the inflation target and would leave the Governing Council well positioned to navigate the uncertainty caused by the war, evaluate the upcoming data and maintain flexibility for future meetings. Commenting on Ireland, the officials noted that ‘adjusting for a temporary factor in Ireland, the euro area economy had grown in the first quarter of the year, supported by domestic demand and exports and that when this adjustment was not taken into account, euro area GDP had unexpectedly contracted by 0.2% in the first quarter, owing to a sharp reduction in measured multinational activity in Ireland’.

Key contacts
If you have any queries please contact Timothy.Kelly@iqeq.com. or any member of our sales team at assetmanagement@iqeq.com. Additional information on the Davy Funds Plc range of funds can be found on our website here.

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WARNING: Past performance is not a reliable guide to future performance. The value of investments may fall as well as rise. Investments denominated in non-euro currencies, may be affected by changes in exchange rates when converted to euro or other currencies.

* Effective 1^st May 2024 the IQ EQ Fund Management (Ireland) Limited managed sub-funds on the Davy Funds Plc umbrella were renamed removing “Davy” from the name and/or including “IQ EQ”. ( Davy Global Equity Income Fund to IQ EQ Equity Income Fund; Davy Strategic: Global Quality Equity Fund to IQ EQ Strategic: Global Quality Equity Fund; Davy Global Focus Fund to IQ EQ Global Focus Fund; Davy ESG Multi-Asset Fund to IQ EQ ESG Multi-Asset Fund, and Davy Cash Fund to IQ EQ Cash Fund). There has been no change to the investment objective or process.

IQ EQ Fund Management (Ireland) Limited is regulated by the Central Bank of Ireland. Details about the extent of our authorisation and regulation by the Central Bank of Ireland are available from us upon request.

IQ-EQ Fund Performance Snapshot

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