Good morning, and welcome to the F&C Investment Trust PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to Fund Manager Paul Niven. Good morning to you. Okay. Good morning, everyone. Thank you very much for joining this webinar. Over the next 45 minutes or so, I am going to cover two main areas. Firstly, we introduced our interim results yesterday, so I will give you an overview of how the trust has performed over the first half of the year, some of the key performance drivers, some of the activity which we have undertaken. Let me move into some comments with respect to the current market backdrop, the outlook, the opportunities, and risks as we see it. Let me start with a very brief background on the trust. I think we will have many shareholders online, but just very briefly, as you know, world's oldest investment trust, very long history of delivering strong returns for shareholders, I believe, and consecutive dividend rises, consistency in terms of management. I have been responsible for the portfolio and the trust since mid-2014, so over 12 years now. And we have scale. So scale in terms of assets that we oversee. We are a member of the FTSE 100, and our market cap is over GBP 6.5 billion. In terms of aims and how we seek to deliver outcomes for shareholders, we are looking to deliver long-term growth in capital and income. It is very much focused on growth assets, exposure to listed and unlisted equity, so listed and private equity, blending a range of focused, active strategies. The outcome that we look to deliver is consistent performance outcomes for shareholders and value for money. Again, I will give some context as to how we have done, not just over the first half of the year, but over the medium to longer term as well as we go through. Getting into the detail, we did, as I said, release our interim results for the first half of the year yesterday. This slide gives a summary of what we reported. Now, it was a very strong period for global equity markets. Lots of volatility, but a strong period in sterling terms for global equity markets. Conflict in the Middle East was clearly a point of focus, adding to market volatility, and a really exceptional period in terms of some individual stock contributors to returns. So, what I mean by that is there were some tremendous gains from individual stocks over the first half of the year, which I will explain as we go through. Another key theme clearly was that of AI, and particularly the impact of AI infrastructure spending, driving returns within the market. Magnificent Seven, that small core of very large disruptors that has led the market for many years, they actually underperformed market indices in the first half of the year. Slightly losing value, actually. Significant dispersion in returns within the Mag Seven and across the market. Several of our holdings doubled, trebled in periods in some instances, and I would say in summary, within the underlying strategies that we run, which I will get into detail of, some of those exceptional stock returns were either key contributors to strong returns from individual components of the portfolio. Or conversely, in a number of instances where we didn't hold these highly performing stocks, it was a detractor from returns in some instances, meaningfully. Again, I will give you a bit more detail on that as we go through. The headlines in terms of returns that we delivered for shareholders in the first half, 12.8% in terms of shareholder return. That was ahead of the benchmark return of 12.6%, marginally ahead, while our NAV was slightly behind at 12.4%. The reason that the shareholder return was slightly ahead of NAV was because our discount narrowed, ended the period at 6.6% at the end of June. And we did buy back around 0.7% of shares in issue over that six-month period. Net revenue return per share increased by 8.4%, so up meaningfully, and our underlying portfolio of assets delivered a return of 11.8%. And just on this point about exceptional returns and putting some numbers to it, some of the stock individual. Sorry. Some of the top individual stock contributors to our relative returns were Applied Materials up 186%, SK Hynix, a Korean-listed company, which has delivered tremendous returns but also been very volatile, up 284%, ASML, a European semiconductor play, up 85%. But conversely, some limited exposure to names like Micron, up 310%, Intel, a familiar name, up 284%. And I think the standout performer over that six-month period, Sandisk, up 872%. So there was incredible individual returns, and as I said, holding some of those very highly performing names was accretive to returns. Some strategies lacking exposure in a number of instances to names like Sandisk, for example, that did detract. Private equity. You will be aware that private equity is a differentiator in terms of the trust. A good period for private equity, holdings up 9%, but they did lag listed market returns. We did announce our first interim dividend, which is just under GBP 1 per share at GBP 0.99 per share, and the board are committed to another rise in 2026, and that will be the 56th consecutive annual rise. As I am sure you will be aware, there was a four-for-one share split for the company's shares. In terms of performance returns and outcomes, we have, as I will show you, delivered returns which exceed the median peer year to date one, three, five and 10 years in both NAV and shareholder returns, which is obviously pleasing. And in terms of this point of value for money, we continue to have an OCF, that's ongoing charges, a measure of costs on the trust of 0.45%, which is flat on the year. That's the highlights from the slide. In terms of that 12.8% shareholder return that I mentioned, that was made up of a portfolio return of 11.8%, as I already said. Positive contribution from gearing, so the fact that we borrow to invest, that was positive in a rising market. We bought back, as I said, 0.7% of shares in issue at a discount. Again, that was accretive to return modestly. Changing the fair value of our debt. The fact that interest rates, market interest rates rose slightly over the period, that reduced the fair value of the debt, which added slightly to NAV. Taking off the impact of management fees and other expenses takes you to the NAV total return of 12.4%. Moving from that 6.8% end of period discount to 6.6% added to shareholder total return, meaning that shareholders received 12.8% over the first half of the year. As I said, slightly ahead of benchmark over the period. In some detail, this shows the allocation to North American strategies, European strategies in terms of listed equities, Japanese listed equities, emerging markets and global, and then our allocation to private equity. The second column, in terms of the numerical component, shows the underlying allocation. That shows, in terms of listed and unlisted holdings, how much of our investments are in North America, how much in Europe, and so on. We show the benchmark weighting, portfolio performance, and then what the index return was. This is intended to show you, at the top level, how much we've got geographically invested in North America and elsewhere, how that compares to benchmarks, and then what the underlying returns of the geographic components were. You can see here that North America, our North American holdings lagged over the period, as did Europe, which does include the U.K. That component gained by 9.1%. Emerging markets 18.7%. That was the strongest component in terms of returns geographically on the portfolio. Japan 11.6%, global strategies 13.5%. All components delivering positive returns. Within that global strategies component, where we delivered 13.5%, we've got a strategy called Global Focus. That's a quality growth strategy that outperformed broad index return, delivering more than 20% over the period. While our income focus strategy delivered 9.7% and Global Enhanced 9.2%. In combination, as I said, global strategies delivering an excess return against the benchmark. Within the U.S., it was a period where value stocks outperformed growth. Value indices delivering around 18% against 7%, roughly, from growth. Our allocation stance within U.S. equities was helpful for returns. What do I mean by that? Well, we had more in value stocks than we did in growth. Value outperformed, that was helpful, but stock selection was a modest detractor, despite the fact that JP Morgan, who managed the growth component, delivered a return of 9.2%. As I said, ahead of the growth index return of around 7%. Our value managers, Barrow Hanley, and a strategy run by Columbia Threadneedle were both lagging the wider indices. I would note that for those that are interested in the detail, within the U.S. market and within the value indices, again, really quite an extraordinary period. Micron and Sandisk, two names which benefited very materially and which are referenced already, up by 310% and 870% respectively in that six-month period. They were both actually in the value index. Barrow Hanley, for example, didn't own those names, and not owning those two names accounted for all of their underperformance in that first half period. Interestingly, a name like Micron Technology is now in the growth index rather than the value index, given the uplift that we've seen in terms of stock price, and the associated value of that stock. As I said previously, private equity has a good period. 9.1% is a very respectable return from private equity, but that 9.1% did lag strong returns from listed equity markets. Proportion in private equity was flat at around 11%. We selectively made some new investments. Again, getting into a bit of the detail, within that private equity component, Schiehallion was a highlight. That is a listed holding, a closed-ended trust that is run by Baillie Gifford, that was up by around 40% over the period, benefiting from uplifts in names like SpaceX, which obviously listed towards the end of the first half. Pantheon, who run a future growth program for us, investing in venture and growth names, that was up by around 11%. The newer commitments that we made through Columbia Threadneedle, they were up by 5% over the period. It was a good period overall, I would say from private equity, but lagging strong listed market returns. This slide, which many of you will have seen before, gives an overview in more detail of those allocations that we have in the portfolio. I'm not going to dwell too much on this slide. There's a lot of detail here. There were no new strategies which we incepted during the first half. There was no change in managers over the first half either. We did make some allocation changes, which I'll come onto in a moment. Just to remind you about how we run the trust, we've got a range of focused strategies which are outlined here. Each of which are looking to do something slightly differently in terms of stylistic exposure, either investing with a growth bias, value bias, quality bias, or combinations thereof. Investing on a regional or a global basis in a listed space. We blend together those strategies to incrementally add returns while reducing risk on the portfolio. In the private equity space, we've got a couple of main strategies. That Pantheon future growth exposure that I mentioned, that's a bespoke program run by us, run for us I should say, by Pantheon, investing into leading venture and growth managers. Then a range, again, of bespoke fund and co-investment exposure run by Columbia Threadneedle. On the listed side, all of these strategies are run within separate accounts. So not fund of funds, but separate accounts, mandates that we specifically have mandated either through internal management arrangements with Columbia Threadneedle or external managers with JPMorgan, Barrow Hanley and Invesco being the primary third-party managers. As I explained previously in prior webinars, Invesco were appointed just in the earlier part of last year to manage that emerging market component for us. That's an overview in terms of the underlying strategies that we have in the portfolio. This slide, again, quite a lot of detail here. I'll draw out some of the highlights, shows you how allocations have changed through time. It's got end of year periods, end of year exposure for the last few years, and then the end of June exposure. You can see periodically if you go to the left-hand side of this slide, that we've managed exposure quite actively between growth and value in the U.S. We've got more, as I said, in value than we do in growth at the present time in that U.S. market. We have been selling U.S. equities. That was last year and in the first half of 2026 as well. U.S. core, you can see has been reduced. That's the third set of bars along, that's been reduced quite meaningfully, over the past few years. On a combined basis, we sold around about GBP 240 million out of U.S. core, U.S. large cap growth in the first half of the year. We purchased emerging markets. There was around GBP 135 million worth of physical equities bought in emerging markets in the first half of the year. Again, we'd increased our exposure there previously. We also made some increased allocations towards Global Focus. That's that quality growth mandate that I mentioned. We made some divestments from Europe, which is a smaller portion of the portfolio than it was a couple of years ago. Those are the main changes made over the period. We did also, I should say, add some exposure to U.S. and emerging market equities during that period of weakness, on the onset of the conflict in the Middle East. We took the opportunity to buy GBP 80 million worth of derivatives, contracts on EM and U.S. indices during that point of weakness after the U.S. and Israel commenced military operations against Iran. That's proven thus far to be a profitable trade because obviously markets as we speak right now are very, very close to record highs in the U.S. and at record highs in the U.K., for example. Just a few comments on the U.S. market and how that's performing against the rest of the world and also on the Mag Seven. We have, as I said, in recent years, been reducing that exposure to the U.S. It's still the single largest component of the portfolio geographically, but exposure there has been brought down. The U.S. has begun to lag global indices over the course of the past year or so. Ten years to the end of 2025, you can see the gray bar is the S&P, that's the U.S. Bellwether Index that was returning more than 15% per annum, well ahead of non-U.S. equity indices and The Magnificent Seven, a key contributor to that return profile. Since the end of 2025, or sorry, during 2025 and subsequently into 2026, however, we have seen the U.S. begin to lag in performance terms and The Magnificent Seven also lagging. At the end of June, The Magnificent Seven group of stocks were actually down year to date. They're now up about 4%, again, lagging wider index returns. This point of the U.S. is still doing very well in absolute terms, but it is beginning to lag non-U.S. indices and that picture has carried on through 2026 thus far. Again, this slide just gives a sense of what performance of the U.S. market was in 2025. That's the orange line there. In a relative basis against the rest of the world, then shown over the course of 2026. The picture is the U.S. is no longer leading global equity markets and a big reason for that is due to the Magnificent Seven no longer delivering those exceptional returns that we had become used to. A few words on revenue and dividends. Again, a lot of information on this slide. The highlight I gave you already was that we had an 8.4% in net revenue return per share over the first half. We've got high levels of revenue reserves, equivalent to around GBP 0.072 per share at the interim period. That compares to our full year dividend, which is adjusted for that four-for-one share split of GBP 0.0415 per share that we paid in 2025. The board have indicated their intention to deliver another rise in dividends in 2026, which as I said previously, will be the 56th consecutive rise in dividends for the trust. A look through exposure. Again, I won't dwell on this. Largest single component, North America. Again, this does include private equity and technology is comprising a large component of our overall listed exposure. Gearing. A few words represented gearing here, including the futures positions, which do increase our overall market exposure. Although we're not technically borrowing to achieve that increase in exposure to listed equities. You can see over the first half of the year, we modestly raised gearing levels. Again, taking advantage of an opportune time to raise exposure to listed equities during that period of weakness after the conflict with Iran had begun. Gearing raised modestly over the period. The other thing to say is that we did have a maturing long-dated loan during the first half of the year. We had EUR 42 million debt, which matured. We took out a revolving credit facility and put it to work in terms of equity investments as well. This shows you a breakdown of our borrowing costs. We are very fortunate to have a substantial amount of long-dated debt, which we secured at very low fixed rates. This shows you the breakdown of that debt, including that revolving credit facility that I mentioned and the interest rate that we pay on debt, which matures 0 to 10 to 20, and so on, years out. The blended cost of debt is around 2.6% when we include the revolving credit facility. If you exclude that, it's around 2.4% and we've got more than GBP 600 million worth of debt on the trust as things stand right now. Discount, as said, this gives you a longer-term perspective in terms of year-end discounts, where we ended the interim period. In slightly at 6.6%, we bought back 0.7% of shares in issue and this gives you a picture in performance. There's numerous ways to consider performance outcomes. Obviously, when one looks at shareholder and NAV returns that we have delivered, they're very strong in absolute terms, 12.8% year to date, 20.3% in shareholder return terms over the past year. Sorry. When we look at compounded returns three, five and 10, again, it's been a really exceptional period for investors in the trust, driven by strong returns from listed equities predominantly. Very pleasing, obviously in absolute terms. I also show you the rank of the trust against the AIC peer group. There's only a small number of peers and a smaller number of peers than we did have one or two years ago within that global sector. Overall periods, we're ranking first, second, or third, and again, it's pleasing to see that over the five-year period, we are number one in shareholder return terms and in NAV terms. I do make comparisons against open-ended equivalent and also the market benchmark. A couple of points I would just draw out in terms of these performance outcomes, beyond the obvious statement that they are strong. It is very pleasing to see high levels of consistency of returns with respect to our peers in particular. We are in a unique position, having delivered returns which exceed that of the median peer in shareholder terms, return terms, and NAV terms over all these periods. That speaks to this point about our focus on delivery of consistency in terms of outcomes for shareholders. It also speaks, I think, to this point on diversification. It was a period, really, as I said, of exceptional returns from some individual stocks. Diversification helps to capture returns from a wider range of opportunities than focused portfolios. As I showed you in the slide earlier, we do have a diversified portfolio, but blending together a range of focused strategies. That has proven to be advantageous in terms of capturing those outsized returns from that small cohort of stocks, which really have driven markets over the first half of the year. That is summary in terms of the interims. I'm going to make some comments on the outlook. I'm going to try and run through this relatively quickly because I know there are questions that you will want to get to. Starting with the energy market, Iran, conflict in the Middle East. These slides were updated a few days ago. Obviously, things have moved on. We're back to another ceasefire. We do have another couple of weeks until that memorandum of understanding expires. There was a 60-day period, which was given for negotiation. That expires on the 20th of August. We're in a bit of a lull in terms of, obviously, conflict in the Middle East at present. The chart on the left here shows you the collapse in terms of tanker crossings in the Strait of Hormuz. Everyone on the call will be aware that that is a critical area in terms of energy and commodity supply for the rest of the world. It's had a very big impact in terms of this disruption on the oil price. Clearly, amongst other commodities and related areas. Comparing, on the right-hand side, the oil curve. This is from the market of expectations for future oil prices. You can look at what the oil curve was saying before the conflict began. That is the orange dotted line there, pre the Iran attack. Far lower than where we are now, which is the dotted blue line. The market is still assuming that there is, I think, going to be some resolution to the stress in the Middle East. We would concur. Our view is unchanged. We think that both sides do have a clear incentive to reach a resolution. I think it's fair to say that Iran does remain incentivized to stretch negotiations out. At the present time, the U.S. does appear to be in a relatively weaker position and a weaker position than it was several months ago. Military escalation is unlikely to unblock the current impasse, we should expect some more volatility, persistent threats to the Strait of Hormuz. The most likely exit, I think, that we will see will involve some kind of "service charge" for the Strait of Hormuz on an ongoing basis. It won't be regarded as a toll, it will effectively be the same outcome. The market does similarly believe that we're not in a permanent situation of disruption. The oil price is expected to moderate from current levels in coming months and out into 2027. I would say that, while there was a response in terms of the oil price, there's been estimates that just over 9 million barrels per day of production was shut in across key Middle Eastern producers during recent months. That's equivalent to about 9% of global supply. That shortfall that the market has faced has largely been met with inventory drawdowns. Global stocks have supplied the equivalent of up to 7 million barrels per day. You've seen that with U.S. crude and refined product exports. That's shown in the gray line on the left. That's helped to bridge the gap in terms of lack of supply. There's clearly limits as to how long this can continue. Inventories are falling. We may well be approaching operational lows over the summer. The situation is becoming more challenging. The chart on the right shows European gas supply. It does help to explain why the broader impact in terms of disruption has been more contained than was the case in 2022. Europe is less dependent on pipeline gas and LNG, which is shown by the shaded gray area is now playing a larger role. New supply is going to take time to come through, prices are going to remain volatile. The upside scenario for oil moving to GBP 70. If one looks at futures right now, it's currently around GBP 84, when one looks at Brent. To get a meaningful decline from here, for the ceasefire to hold, obviously for low-level attacks to similarly cease some tentative reopening of the Strait of Hormuz, pause on U.S. sanctions on Iranian oil, clear progress towards a more durable agreement, clearly that is what we're hoping for. Conversely, the more bearish scenario where oil moves towards or through GBP 100, would be another period where diplomacy breaks down, attacks widening again in terms of scope, scale, geography, Strait of Hormuz effectively closing, disruption to the Red Sea, returning conflict lasting beyond the U.S. midterms, that's November. Inventory drawdowns slowing. It remains finely balanced, we, I think the market, do expect some resolution. Despite all the noise, the global economy has been, I think, more resilient than many people would have expected. The chart on the left shows 2026 consensus GDP growth expectations. That is the orange bars there against 2025, the blue. Europe and the U.K. have seen the biggest downgrades. Global growth has only eased in terms of expectations from 3.2% to 2.9%, so a very modest downturn. U.S. looks resilient. Growth there is still expected to be just north of 2%. Fiscal support, easier financial conditions, AI-related investment, all helping. On the right-hand side, you can see that we have got above target inflation, tight labor market, and that has brought the risk of further rate rises back into focus. A Middle East conflict lifted energy, consumer price projections, quite meaningfully actually. That has led to an upgrade to rate expectations. People had been expecting rate cuts, and now rate hikes are on the agenda, driven by this changed inflationary backdrop. In a bit more detail, on the left-hand chart here shows you a slightly longer-term perspective in terms of the inflationary backdrop. Still relatively contained, but inflation has not moderated to the extent that had been hoped. Europe does appear more exposed than many other areas, with the energy shock already feeding into prices. The ECB has hiked by 25 basis points in June. Markets are now pricing in another couple of hikes. As you can see on the right-hand chart from the ECB, they are also expecting a hike from the Bank of England, one from the U.S. Federal Reserve, more from the Bank of Japan as well. Our view would be slightly more constructive in summary. We get too caught up in all of the numbers, but we would expect some less tightening, or less tightening from the Bank of England than markets imply. Probably more balanced in terms of the outlook for the U.S. Federal Reserve. The market has similarly moderated their expectations from two hikes to closer to one for the U.S. now. Government bonds. This chart, or these charts, show you the U.K. gilt market, and other global bond markets. Interestingly, U.K. 10-year gilts are higher than many other developed areas. Closer to 5% in the U.K., well above what we see in the U.S. and elsewhere. Interestingly, the U.K. has responded more negatively in terms of a move up in government bond yields than many other developed areas. We think some of these concerns are somewhat overstated on balance with respect to the U.K. Obviously, it remains to be seen what the domestic political agenda looks like in terms of how more fiscal expenditure is going to be funded. We do think there is value now actually in government bond markets. Corporate earnings. Now corporate earnings have really driven equity markets year-to-date. Surprised very strongly. That green line on the left-hand chart there shows you expectations for the global equity market in terms of earnings growth for 2026. There has been massive upgrades. Really unusual to see the extent of upgrades that we have seen outside of recovery from a recession. Obviously, there has been no recession and no sharp economic recovery. In fact, economic growth in the U.S. is going to be slightly lower this year than last. Nonetheless, there has been a massive upgrade to earnings expectations. The chart on the right here shows you expectations across the main regions at the beginning of the year. That is the gray dot there, and where they are at the latest reading. There's been upgrades from the beginning of the year expectations everywhere. With the U.S. and emerging markets really the standout areas. A lot of this has been driven by technology and in particular, but also earnings. They've been revised higher everywhere. Within emerging markets, upgrades have been concentrated, as you would expect, in Korea and Taiwan. That reflects AI demand. In Latin America, you've seen upgrades driven by higher commodity prices. These earnings upgrades really supporting equity market progress. Big dispersion within sectors. Energy sector in the left-hand side of the left chart there, now expected to deliver some of the strongest earnings growth in 2026, which is a big reversal from negative growth last year. IT, also expected to deliver very strong growth, but building on very good results last year. The right-hand chart, really getting into the technicalities. This just shows you the spread in terms of performance between the best and the worst sectors in the U.S. Unusually wide dispersion of returns within the market from a sectoral perspective. Breadth remains narrow, I think is the key point. The Magnificent Seven, which as I said, have been lagging. A lot of detail here, a few points to make. We can look at the forecast for The Magnificent Seven in terms of their earnings growth projections. 2026 now expected to grow earnings by 32%, against the wider market, which is now at 24%. Very strong growth from the wider market, but stronger still from The Mag Seven and way higher than was expected at the beginning of the year. On the right-hand chart, another key point is that we've had huge capital expenditure plans outlined by the hyperscalers, who are obviously driving this AI infrastructure spending boom. You can see the capital expenditure plans for The Magnificent Seven-- or sorry, capital expenditure for The Magnificent Seven, which is the blue line there, has overtaken free cash flow and is on current projections expected to rise further. AI, rapid technological progress, but more limited near-term commercial returns in terms of those that are making the investments. Current pace of spending really rests on expectations of future monetization and the belief that these first-movers are going to secure a lasting advantage. Moving on to equity returns and valuations within technology. There's been a clear rotation from software towards semiconductors and hardware over the past year. This has partly reversed over the past month. That's the blue line, the Philadelphia SOX Index, which has had a phenomenal period over the past year or so. Came back about 20% in July, bounced in recent days from that. AI has clearly raised questions about which part of the ecosystem are going to benefit most. The market has concluded and we would concur that software does look more exposed to disruption given AI's ability to automate coding and related tasks, while semis and hardware do look to be direct beneficiaries of the investment cycle. This has supported far stronger technology performance in Japan and emerging markets, shown in the right-hand table there. Again, it's a few days out of date. Market's been very volatile, but indices such as Korea and Taiwan have really benefited with heavier semiconductor and hardware exposure. I should say that during July, we've had a massive setback in terms of some of these individual stocks and some of these indices, with Korea particularly hard hit with retail de-leveraging, really driving that sharp reversal in the market. Valuations. I think it's fair to say the equity markets don't necessarily look cheap when one looks at the U.S. Conversely, emerging markets, very much helped by the upgrades to earnings that we have seen, and which I reflected on a few moments ago, looking far better than developed market equivalents. Emerging markets, despite the recent setback, have had the strongest year-to-date returns. That's shown on the right-hand side here. Again, quite a big downturn over the past month or so. Our view is that, in terms of conclusions from all of this work and analysis, central case is still supportive. It's been a very good period for equity markets year-to-date and in recent years. Global growth has held up far better than expected despite the oil shocks supported by policy, resilient demand, strong corporate balance sheets, and AI spending. Range of potential outcomes and risks. Wide geopolitical uncertainty does create obvious risks, and that may continue to weigh on confidence. We'd say that the outlook for equities does remain well-supported by the corporate earnings backdrop, which looking into 2027, continues to look favorable. Very cognizant of the risks, very cognizant of the fact that the Middle East, and geopolitics in general, does remain an ongoing source of potential volatility. We do think that the corporate earnings backdrop is supported, the growth backdrop is supported. There is some scope for positive surprises in terms of interest rate expectations being perhaps a little bit too bare. This combination of good growth, relatively modest inflation, interest rates remaining relatively accommodative is a supportive one for equity markets. For that reason, we do think that the outlook does remain on balance positive for markets over the remainder of the year and into 2027. I'm going to pause there. Gone through a lot of detail. Very happy to take any questions. I know that some have come in already. I'm going to pass over to my colleague, who I think is going to moderate from here. I will. Thank you, Paul, very much for the detail. My name is Pete Brown. I am part of the investment trust team at Columbia Threadneedle. Thank you for your questions. Please continue to submit them. If we don't get to answer them today, we will definitely do it in written form in the next day or so, and you can get the answers on the Investment Company website. Paul, straight into it. Lots of questions you can imagine, lots about similar topics. I will try and pair two or three up together. The first one we will start with. Given the current level of optimism priced into all major stock markets and the failure so far to recognize the downside exposure caused by the Middle East conflicts, should F&C not consider pivoting more towards a wealth protection rather than a normal capital growth income measures, at least for a period of time? The short answer is that we will remain focused on growth assets. We have, for many years, focused on listed equities and private equity. The reason that we do focus on growth assets is, in the long term, we think we will get superior returns from that approach, and I think that has proven to be the case when one compares us to vehicles that are more focused on wealth protection or absolute return. I am certainly not, hopefully, I conveyed during my presentation, naive to downside risks. Our view is still relatively constructive and for that reason, we will remain fully invested in equities and private equity. I don't expect that we will be going heavily into cash or diversifying assets anytime soon. We will retain that focus on the long-term opportunities, which we do think remain best in growth assets, equities, and private equity. On a similar theme, question is here, how would you react in terms of portfolio management to price volatility such as that seen recently in the semiconductor sector? Yeah. Very topical, very interesting question. Our underlying managers have moderated their exposure to semis. Take one example of that. For those that are familiar with the trust, my role is to manage the overall composition of the portfolio. As I said, it will take positions between growth and value, typically not taking specific sectoral positions myself, but underlying managers will be active in terms of management of exposure. If I take that global focus component of the portfolio, which is invested globally in quality growth stocks, they had around an 18% long position on semiconductors a few months ago. That has been reined in to around a 10% long position against a benchmark weight on semis. Still long within that strategy, but roughly half the relative position that they were running. That is reflected in a moderation in the semis exposure that we have, the trust overall. We've taken roughly a third, I think, at total portfolio level, out of the long semis position that we had previously. It will be actively managed, but many of our underlying strategies managers remain constructive on the AI theme in terms of playing beneficiaries of the huge AI expenditure, which is ongoing. Shows no sign as yet of slowing down. In many instances, see now very good value in a number of these stocks, which have had quite a material setback, and which are trading on a relatively low multiple. I would say, just adding one more piece of detail, you can take a stock like Hynix, which is South Korean name, which has fallen very heavily over the course of the past month or so. The forward multiple in that stock has fallen from high single digits down to somewhere between four and five times forward earnings, which is very low. The question is, how sustainable are those earnings? Because we know many of these companies are over-earning at the present time. As I said, we do expect that that strong earnings environment for semis AI CapEx beneficiaries will persist, and the valuation is better actually than it was a month or so back. Thanks. There's a couple questions on AI, but I think you've covered that in that answer. We'll move on to the next question about small caps. The latest Morningstar data states that you have 21% allocation to medium and smaller companies, which I haven't checked. I'm not sure that's strictly true. Anyway, how has this allocation evolved over the past 12 months? Do you see an opportunity to allocate more to medium and smaller companies? I'll add that with, does the size of F&C inhibit your ability to take meaningful positions in smaller companies? If valuations point to a good opportunity in medium and smaller companies, would you be able to take advantage? On small caps, I'm not familiar with the methodology that Morningstar used to categorize our exposure, but we don't have a small cap allocation. We did, as I showed in terms of the allocations that we have in the portfolio, how they moved about through time. We did divest in entirety from a bespoke small cap allocation that we had several years ago. That proved to be pretty well timed, actually, because small cap subsequently underperformed large caps quite meaningfully. We don't have a small cap allocation right now. The way that the portfolio is run is essentially predominantly large caps, then we've got this private equity exposure. That private equity exposure is largely in very small companies, that would be in the smaller micro-cap space. It's more of a barbell with large cap and unlisted smaller company exposure through our private equity holdings. A chunk of that is invested in what we'd call mid-market private equity, and that's typically where the enterprise value of the opportunities is less than GBP 500 million, which is pretty small in terms of size. I don't have any immediate plans to go back into the small cap space. Were we to choose to do so, we could do that either by buying a pooled investment or by re-incepting another bespoke mandate, which we did have previously. I know there's been some pickup in small cap performance. It depends on what index you use or what geography you look at. If you look globally, small caps are pretty much in line with large caps over the course of the past year and year to date. Obviously, within that, you can see different geographies having better returns. In the U.S., there's been a much more meaningful pickup over the course of the past six and 12 months. I don't think that we're, at the present time, really foregoing much by way of opportunity cost. It's fair to say that they're trading on a discount in general to large caps. I would have a view that many of the current trends which are pre-eminent in the market do suggest that large cap names will continue to benefit. It's about more concentration in terms of industry structure. The oligopolization of a number of industries, the fact that winner takes all or a small number of companies dominate, even beyond technology, I think those trends do and will persist. Also, there's been quite a change in terms of makeup of small cap indices in recent years, where actually the quality, arguably, in terms of those indices has diminished. We've seen a number of key names fall out of the indices. Therefore, comparisons with the past, perhaps not quite as relevant, I think, as where we were previously. Short answer is, no immediate plans to go back in small cap. If we choose to do so, however, we do have plenty of latitude in terms of exposure and means of access. That barbell between large and unlisted privates is the way that we're playing markets at present. Lovely. Moving on to Asia and emerging markets. The interim report shows you have 4.7% allocated to developed Pacific and over 10% in emerging markets, which I assume includes countries in the Pacific region. Which countries are in the developed Pacific allocation, and what is the Pacific allocation within emerging markets? Okay. One of the things about developed Pacific, again, different index providers and different managers will probably categorize different countries in different ways. The FTSE, who provide our index returns, they will have Australia and South Korea as two of the largest developed Asian constituents. Those two countries comprise around 80% of the developed Asia index. Other names included would be Hong Kong, Singapore, and then you get into smaller areas like New Zealand. Our emerging market manager, that's Invesco, we give them wider degrees of freedom than that, and their mandate includes exposure to South Korea, for example, even though technically it sits within the developed Asia part of the market. MSCI and FTSE categorize things slightly differently. The main difference is Korea, and whether that's categorized as an emerging market or a developed market. Again, there's a debate, that's the most meaningful difference in terms of index constituents. Hopefully that answers the question. Yeah, we have a follow-up question from someone else. Are you concerned at all that emerging markets could be getting overheated? Very interesting. Emerging markets, we allocated more capital to emerging markets last year. We allocated more capital to emerging markets this year. As I said, quite a meaningful increase in terms of overall exposure. To be honest, part of that view was predicated, let's say 12 months ago, by a view that global growth was going to be good and inflation was going to remain relatively modest. Interest rates were coming down at that point, we thought, and emerging markets were trading at a big discount. The combination of those factors would be an environment where you would expect emerging markets to perform well. Emerging markets subsequently have performed very well, clearly, the standout area geographically over the course of the first half and over the past year. Implicit in the question in terms of the strength of that return is the fact that they've become, in large part, a play on the AI theme, and that is due to performance of semis. If you look at an MSCI Emerging Markets Index now, you've got more than a quarter of that index is Taiwan and TSMC, semiconductor name, a big, big constituent in terms of the Taiwanese market. South Korea is just under 20%. Again, names like Hynix and Samsung, again, plays on AI. I think it's unambiguously fair to say and conclude that the AI theme has driven a lot of that positive return in emerging markets over the first half and over the past year. When we look at valuations, again, there was a slide in the presentation pack which showed you that despite the strength in returns over the course of the past year, emerging markets are actually trading cheaper than they were a few quarters ago. Why is that the case? Because earnings expectations have outpaced price rises. We do think that those earnings expectations are justified, and therefore, a lot of heat has come out of emerging market performance over the course of the past month. A lot of underperformance and sharp downward move in Korea, down 40% or thereabouts, I think from recent peak. Massive turnaround, a lot of that driven by de-leveraging, unwind of positions. I think a lot of heat has come out. We remain constructive from here. I think emerging markets look cheap. The fundamental backdrop remains constructive for the reasons that I outlined previously, notwithstanding the fact that the interest rate environment has changed somewhat. Good valuations, good growth backdrop, moderating inflation from here. The AI theme, we do think does remain constructive for large parts of EM. One other point I would just make was that we obviously had quite a big event over the course of the past week with unwind of a hedge fund called Situational Awareness, which I think was four times levered AI play. I think a lot of the not a lot, but there's been some distressed sellers, whether it's in the retail space in South Korea and elsewhere, but also some hedge funds, which have led to some very, very sharp unwind of positions. Hopefully, we're through the worst of that in terms of this unwind of overexposure to semis by speculative investors. Again, too long-winded. Apologies. I think a lot of heat's come out of emerging markets. There is value, is the short answer. A very quick one-line, if you can, on this theme. What's your view on Chinese markets or Chinese-listed shares in Hong Kong specifically, is the question. We are, I think, within the emerging market component, just slightly long. I maybe, given the time that we're at now, come back to the person or as a response to a fuller answer on that. Yeah. Fair enough. We're getting close to the hour. I'll just try and sneak in a couple of quick ones as we finish on derivatives. The manager mentioned that a derivative position was taken out during the first half. Does the board place limits on the use of derivatives by the manager? I'll mix that with, please can you say something about your use of CFDs? How much are they used and how are they used? Okay, the latter point, we don't use CFDs. The derivative uses I mentioned during the first half was futures. Essentially, we bought futures on two indices. One, the S&P, that's a U.S. index, and the second, the MSCI Emerging Markets. There are clear constraints that we operate within with respect to the use of futures. In simple terms, however, I would say that derivative and previously, we have used forwards, currency forwards, to manage our currency positions. In simple terms, when we use futures, we will use that to essentially affect overall portfolio positions. In this case, to raise exposure to markets, emerging markets, and the U.S. The constraints that we operate within are basically those that apply to wider leverage constraints that the board set out, where we can't have more than 20% gearing in any form, and derivatives form part of that. There's numerous other aspects to it, but essentially, we're constrained in terms of how much we can use to add leverage to the portfolio and increase market exposure. We'll finish on fees. Two questions into one. How do you choose your external managers, and how do you decide whether and when to change them? Are the fund manager fees in addition to the annual fee for the trust? If so, what are these fees and can they be listed in the future? What are they in aggregate as a percentage of returns by manager? On the second point first, the 0.45%, that's an Right, hopefully, this answers the question. 0.45%, that is the ongoing charge for the trust. That includes internal fees, what are called Columbia Threadneedle's fees, external fees like Invesco, Pantheon, JPMorgan, et cetera, and additional administrative expenses. That's all wrapped up in that 0.45%. We disclose the fees that Columbia Threadneedle charge in terms of, there's a tiering. We get paid a market capitalization. We get paid, for example, the top tier 0.2% on the market value above GBP 6 billion, and there's tiering, which is reflected in our documentation that you can look at, which outlines exactly how Columbia Threadneedle get paid. On the point of how do we select and change managers, look, we get paid a market capitalization, so whether we employ an internal or an external manager, the fee to Columbia Threadneedle is unchanged because it's market cap based, not asset based. Therefore, my motivation is to deliver the best outcome for shareholders. We've got a lot of resources within Columbia Threadneedle, within my team, which is 25 strong, plus an additional manager selection team, which is more than 20 individuals who are very experienced in terms of selecting managers from across the market. We use them to essentially scope the opportunity set in terms of strong managers with a clear mandate from a geographic and stylistic perspective. We test the integrity of the team in terms of personnel, philosophy, process, against performance outcomes. Where we think it is appropriate and when we think it's appropriate, but always for strategic reasons, we will effect a change. As I said, around 18 months ago, we did take a mandate from Columbia Threadneedle and give it to Invesco because we felt that we would get superior return from that third-party manager by virtue of the resources, the people, the process, along with a host of other factors and related considerations. There's a whole process we go through, and ultimately the board have to sign off on any external appointment that we make for the trust, and we obviously share all that diligence that we undertake and the rationale. Marvelous. Well, we'll have to end it there. Apologies if we didn't get to your question. We will answer them, as I say, post-meeting, and you should be able to see those answers on the website in a day or two. With that, as disclaimer comes up, Paul, I'll just pass to you to give a final 30-second summary, and then we'll hand back to the moderator. Okay. Firstly, thank you very much for your time today. Really appreciate you attending. There's lots of questions which have come through, which I apologize that we've not managed to answer. We will come back to them and post answers as quickly as we can. Thank you very much for your interest, thank you very much for your support, and look forward to speaking to you shortly. That's great, Paul. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation. Good afternoon to you all.