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April 2021 LEMD Fund Commentary

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Eurizon SLJ Local Emerging Markets Debt Fund Monthly Commentary April 2021

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For professional investors only Overview The fund provides exposure to emerging market debt opportunities in local markets and offers a compelling long-term alternative to core credit fixed income investments. Key points: While being benchmark-aware, the fund has the flexibility to invest beyond the benchmark to potentially enhance returns and minimise risk over the medium to long term. Bond and currency decision making is separated, leveraging the expertise of our fixed income and currency experts. Idea generation is supported by our global macroeconomic research Meet the team The Investment, Advisory & Research team share a strong collaboration ethic. This allows a constant stream of information on macro, economic and monetary themes leading to interesting investment ideas and opportunities. Based in London, our team is extremely diverse in terms of cultural and professional background. Most of our portfolio managers are originally from the emerging markets and speak local languages, having lived and worked in these countries. This provides us with the unique combination of being able to understand the local culture, whilst also applying the global context of how the outside world views these markets. Yasmine Ravai Senior portfolio manager Alan Wilson Portfolio manager Joana Freire Economist & portfolio manager

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For professional investors only Market update It was a much-improved month for emerging market rates and foreign exchange in April. Risk appetite was supported by a cooling of upward core-market yield pressure and the weakening USD, as the Federal Reserve reaffirmed its commitment to an ea sy monetary stance. That said, while the new quarter marked a more positive tone for the asset class as a whole, idiosyncratic risks continued to flare domestically. Headlines focused on the intensification of the geopolitical standoff on the Russia -Ukraine border, the increasing likelihood of an extreme left President in Peru and the ongoing budget deadlock in Brazil. While we welcome the tentative signs of stability in emerging markets, following volatility in our asset class over the course of Q1, we remain vigilant in the near term. Ongoing US exceptiona lism is highly likely to result in further market challenges to the accommodative stance of the Fed eral Reserve, higher core market yields and the potential for episodic pressure on emerging markets. Local: It was a positive month for our index (JP Morgan GBI-EM index1) closing 1.9% stronger in GBP terms. EMFX: Emerging market currencies also stabilised in April, with the EMFX composite approx. 1.16% stronger vs GBP. 1 JPMorgan GBI EM Global Diversified Index®

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For professional investors only Portfolio Rates What we thought Given the broader vola tility in emerging markets, overweight positions are best expressed on a selective basis. Longer term, emerging markets will be supported by increased cyclicality and enhanced/coordinated policy stimulus. Action taken We maintaine d our marginally underweight local rates stance; bullish EM outlook expressed selectively with conviction longs paired vs structural shorts. We maintaine d our overweight position in external rates which offer deep value opportunities and better protection vs core market yield spikes. We maintaine d our defensive stance via our short UST position in the belly of the curve. Portfolio impact Our neutral topline duration position detracted from performance over the month. That said, our structural local rates short positions in Peru and Thailand enhanced fund performance. Portfolio long positions in Mexico and Indonesia were positive contributors to fund performance in April. Our overweight position in external emerging market debt marginally detracted from fund performance.

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For professional investors only Currencies What we thought We continue with our cautious stance in EMFX while we see volatility in the broader asset class. We maintain our long bias in EMFX pairs where there are strong structural underpinnings and deep value. The portfolio continues to favour short EURUSD as an offset to our market beta exposure. Action taken The fund remained overweight in INR which continues to stand out as a leading high carry/low volatility position. Likewise, the fund r emained overweight in EGP which we believe can continue to perform as Egypt moves up the credit ratings spectrum . On the other side of these EMFX positions, we prefer EUR shorts which are likely to underperform vs the USD over the short term. Portfolio impact Our currency positions negatively contributed to fund performance, with both INR and USD the main detractors over the month.

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For professional investors only Key views within the portfolio Roaring Growth, Increasing Divergence: The global growth rebound continues to accelerate from the depths of the COVID crisis, facilitated by the V -shaped upswing in both industrial production and goods demand. Crucially, as vaccination programmes gather p ace, the nascent economic recovery is highly likely to be augmented by a concurring upswing in services. That said, in contrast to the recovery from the global financial crisis in 2008, we believe that the rebound this time around will exhibit significant regional divergences. In our view, the United States is highly likely to lead the economic rebound over the course of this year, followed closely by China. Emerging markets are likely to lag the broader economic recovery this year; while many emerging ma rkets are likely to continue to benefit from increasing cyclicality and ongoing demand for both commodities and construction machinery, others will remain highly exposed to vaccine shortfalls, the likelihood of shallow economic recoveries and the resulting fiscal slippage. Drawing this macro calibration together, we anticipate higher core market yields and episodic pressure on emerging markets. That said, we believe that longer term, there is ample opportunity within the emerging market universe to extract selective alpha. With further fiscal stimulus enter ing the system via the Biden infrastructure plan, the foundations for the cyclical rebound are solid; this backdrop is highly likely to support allocations to emerging market rates and cur rencies. We favour emerging markets which have robust structural underpinnings which will insulate from the episodic periods of volatility in our asset class. Transitory Inflation, Structural Headwinds : Many commentators have likened the upside inflation pressure we are experiencing this year to the persistently high price pressure last seen in the 1970s. We disagree with this diagnosis.

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For professional investors only In our view, it is unlikely that we will see accelerating and disorderly price pressure in the second half of this year; recent upside inflation surprises are entirely transitory and related to (a) temporary COVID driven supply bottlenecks and (b) commodity price base effects working through the indices. In our view, the long run deflationary structural factors – such as demographics, technology, spiralling debt loads and inequality – remain at large. We firmly disagree with the prevailing market narrative that monetary policy makers, in particular the Federal Reserve, will pre-emptively tighten in response to current inf lation pressure; as global stimulus remains ample, amidst a backdrop of ever increasing negatively yielding debt, we envisage a favourable environment for selective emerging market allocations. Fiscal Dominance, Fiscal Divergence: Normally, stronger growth in the US and China would be a welcome development for the emerging markets; core market growth would typically spill over into other economies and generate a synchronised global rebound. This backdrop typically induces a ‘risk -on’ in global markets, drives capital inflows into emerging markets, a weaker USD and easier financial conditions all around. However, fiscal policy divergence, which has in turn driven US and Chinese exceptionalism, is a potent challenge for emerging markets. All else equal, where growth differentials are skewed against emerging markets, capital outflows are likely to flow away from emerging markets. This seamless flow of global capital is forcing a synchronicity of monetar y conditions across emerging economies despite a sharp asynchronicity of their recoveries from the pandemic. As a result, we believe that monetary policy stimulus has peaked in most emerging markets, with fiscal policy the likely go-to policy tool to insulate the post -COVID rebound. Drawing this policy outlook together, with fiscal stability so disparate across the economies in our universe, we believe there are ample cross market opportunities in our universe.

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For professional investors only Outlook Looking forward, despite the prospect of higher core -market yields, we continue to see medium-term opportunities in select rates and FX trades and remain broadly constructive on the asset class. With further fiscal stimulus entering the system via the infrastructure plan, the foundations for the cyclical rebound are solid; this backdrop is highly likely to support allocations to emerging market rates and currencies. Furthermore, we firmly disagree with the prevailing market narrative that the Fed eral Reserve will pre-emptively tighten in response to current inflation pressure. We believe recent upside inflation pressure is transitory in nature – born out of commodity price pressure and COVID related supply bottlenecks – which could diss ipate over the course of H2. As global liquidity remains ample, amidst a backdrop of ever increasing negatively yielding debt, we anticipate emerging market inflow s will persist. That said, we are cognisant that we could see further episodes of yield spikes as transitory inflation pressure runs through the system in H1; as such we position in selective rates and FX opportunities which are fundamentally equipped to weather the short run volatility. Do you have a question or comment?We welcome questions or comments regarding our views or strategy. Please contact us using this form: send

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For professional investors only Further information Useful links Visit our website for more insights & details about our strategies Sales & Business Development Matt Jones, Head of Distribution Email: Mobile: 07716 639835 Business address Eurizon SLJ Asset Management 90 Queen Street London EC4N 1SA Fund Information Umbrella Name Eurizon Funds ICVC Fund Name Eurizon SLJ Local Emerging Markets Debt Objective The objective of the Sub-fund is to provide capital growth by achieving a return after fees in excess of the return of the Bloomberg Barclays China Treasury Total Return Index over any five-year period. Benchmark JPMorgan GBI EM Global Diversified Index® The Sub-fund’s investment process is not constrained by the Index and the composition of the Sub-fund’s portfolio may deviate from the Index in a significant way. Accordingly, the Sub-fund’s returns could be similar to or different from the Index. Regulatory Status UCITS Fund Managers Yasmine Ravai, Alan Wilson Share Class Information Currency Acc/Inc Annual Management Charge Minimum Investment Wholesale GBP Acc 0.50% £1,000,000 Wholesale EUR Acc 0.50% £1,000,000 Institutional GBP Acc 0.35% £10,000,000 Institutional EUR Acc 0.35% £10,000,000 Founder GBP Acc 0.25% £1,000,000 Founder EUR Acc 0.25% £1,000,000

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For professional investors only Key Risks Charges from capital The fund charges are taken from capital invested. Taking charges from capital has the effect of increasing the yield, whilst also negatively effecting the growth potential of the investment. Chinese securities The fund invests in financial instruments dealt in on the local Chinese markets, including on the CIBM, and denominated in Renminbi may imply specific regulatory, exchange rate, repatriation and tax risks are detailed in section 5.40 of the Prospectus. Counterparty risk The fund carries the risk that a third-party with which the Sub-fund entered into contracts in order to perform some operations may default on its obligations. Credit risk The risk that the issuer of debt instruments fails to pay to the Sub-fund interests and principal, even only in part. Liquidity risk The risk that the sale of the financial instruments in which the Sub-fund invests may be difficult depending on the features of these instruments themselves and/or on the market conditions when the sale is to be executed or on the lack of a sufficient number of potential buyers. The selling price may then be less than the value of a financial instrument. Geopolitical risk The risk related to the investments in geographic areas that may be sensitive to any event of economic, geopolitical or regulatory nature or any other events beyond the control of the Management Company that could expose the Sub-fund to losses. Exchange rate risk Changes in currency exchange rates may affect the value of your investment. Concentration risk The price of funds that invest in a reduced number of holdings, sectors, or geographical areas may be more heavily affected by events that influence markets and increase volatility. Past performance is not a reliable indicator of future returns. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested.

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For professional investors only For professional clients only. This is a financial promotion and is not investment advice. The Eurizon SLJ Local Emerging Markets Debt fund is a sub-fund of Eurizon Funds ICVC, an open-ended investment company with variable capital with segregated liability between sub-funds. The Company is an investment company with variable capital incorporated with limited liability and registered in England and Wales under registered number IC027300. It is a UCITS scheme as defined in COLL and an umbrella company for the purposes of the OEIC Regulations. The Authorised Corporate Director (ACD) is Eurizon SLJ Capital Limited, authorised and regulated by the Financial Conduct Authority, with firm reference 736926. For more information on the fund, or the risks of investing, please refer to the Prospectus or Key Investor Information Document (KIID), available via the relevant fund information page on Issued in May 2021 by Eurizon SLJ Capital Limited, 90 Queen Street, London, EC4N 1SA. Authorised and regulated by the Financial Conduct Authority, with firm reference 736926. ESLJ-060521-FC2

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