In the initial quarter of 2026, global stock markets experienced considerable turbulence, primarily due to a notable pivot in American monetary policy and divergent strategies adopted by central banks worldwide, all set against a backdrop of persistent geopolitical tensions. These factors collectively shaped a challenging environment for international equities, underscoring the interconnectedness of global financial systems and the impact of macroeconomic shifts.

During this period, the Thornburg Better World International Fund (I share class) recorded a return of -3.56%, trailing the MSCI ACWI ex-U.S. Index by 285 basis points. Positive contributions stemmed from judicious allocation and careful stock picking within the Utilities, Financials, and Consumer Staples sectors. Conversely, the fund's performance was hampered by stock selection in the Industrials sector and its complete lack of exposure to the Energy sector, highlighting the critical role of sector positioning and individual security choices in volatile markets. Thornburg's investment philosophy integrates ESG principles as a crucial lens for evaluating businesses, aiming to uncover mispriced assets and identify overlooked sources of sustainable earnings power.

Amidst a complex global landscape, embracing a forward-looking and responsible investment approach is more vital than ever. By integrating environmental, social, and governance factors into investment decisions, we can not only identify companies with robust fundamentals and resilience but also contribute to a more sustainable and equitable global economy. This commitment to 'better world' investing ensures that capital is channeled towards enterprises that demonstrate operational excellence, ethical governance, and a proactive stance on societal challenges, ultimately fostering long-term value creation and positive impact.