Pinpointing New Growth Opportunities… European Equities and Small-Caps

• The Shift from US to Non-US: The global investment landscape is undergoing a significant transition as investors move beyond high-valuation US tech names towards untapped potential in Europe and Global Small Caps stocks.
• European Recovery: Europe is emerging from structural shifts with improved sentiment, supported by better-than-expected Q4 earnings and projected double-digit EPS growth.

• Valuation Advantage: European equities continue to trade at a deep discount compared to the US market, offering a compelling entry point as investment flows return.
• Small-Cap Favorable Regime: After five consecutive years of underperformance, 2026 marks a new cycle for small caps.
• Interest Rate Catalyst: As debt-sensitive firms, small caps are primary beneficiaries of lower interest rates, which significantly reduce financing costs and boost profits.
• Risk Factors: Geopolitical conflicts may impact asset performance; however, these are generally viewed as short-term risks.

• The Valuation Gap: European equities are starting to attract investment flows but continue to trade at a deep discount compared to the US market.
• Paradigm Shift: Driven by increased defense spending, fiscal stimulus, infrastructure investment, and a strategic focus on protectionism and domestic growth.
• Earnings Acceleration: EPS growth in Europe is expected to accelerate further in 2027. (Source: Goldman Sachs Asset Management as of 9 Mar 2026)
• Dividend Appeal: Europe’s high-dividend nature is historically appealing to investors

• Diverse Investment Universe: Monitoring a broad universe of over 1,200 stocks, typically holding 100–300 in the final portfolio, spreading out risk across a wide array of stocks and investment themes. This insulates the portfolio from underperformance of any single stock.
• Consistent Outperformance: The fund has consistently outperformed the market over the past five years.

•  Europe’s Key Investment Themes for 2026
  • Defense Rearmament: Increased defense spending due to geopolitical tensions.
  • Critical Minerals: Demand for green technology and safe-haven assets.
  • Energy Resilience: Accelerated transition to clean energy and renewable infrastructure.
  • AI Supply Chain: Focus on semiconductors and data centers.

• Thai investors can access this strategy via KF-EUROPE, KF-HEUROPE, and KFEURORMF, targeting high dividends, deep valuation discounts, and alpha-driven returns.
• Funds’ Risk Level: 6 – High risk. | KF-EUROPE/KFEURORMF may hedge foreign exchange risk at the fund manager’s discretion.

• Market Rotation: 2026 marks the beginning of a new cycle for small-cap stocks, following five consecutive years of underperformance relative to large-caps.
• Monetary Policy Benefits: While the pace of rate cuts may be gradual, the easing interest rate cycle significantly lowers financing costs, directly boosting profitability.
• Compelling Valuations: Global small caps currently trade at a significant valuation discount of 25% compared to large caps, presenting substantial potential upside as the market enters this new regime.
• Domestic Economy Tailwinds: Small caps are more domestically focused and less affected by global trade uncertainties, which adds resilience.
• Alpha Opportunities: There are alpha-generation opportunities within the non-US small-cap universe in addition to those in the US.

• Investment Universe: Tracks 7,500+ stocks across 24 countries and 11 sectors, diversifying holdings across a vast opportunity set which includes high-quality names with superior return potential.
• Active Management: High performance dispersion in the small-cap space makes active selection essential to avoid laggards and capture top performers.
• Positioning (Feb 2026): Highly diversified across Materials, IT, Healthcare and Consumer
• Discretionary, with an overweight in US and Europe ex UK small caps.
• The fund’s Key Themes in 2026: Focuses on the AI supply chain, energy resilience, and critical minerals within the small-cap universe.

• Invests through Goldman Sachs Global Small Cap CORE Equity, focusing on high-growth themes like AI and energy. The fund features a dividend policy targeting at least 10% of profits.
• Fund’s Risk Level: 6 – High risk. The fund may hedge foreign exchange risk at the fund manager’s discretion.

• Spots Opportunities Early: Information advantage with over 35 years of data-driven experience and access to 1 trillion data points across traditional and alternative data, the Goldman Sachs Asset Management Quantitative Investment Strategies team gains a significant information advantage in identifying opportunities ahead of the curve
• Agile in responding to market dynamics: Portfolios are rebalanced every 3 – 5 days to capture changes in market sentiment
• Consistent Outperformance: Both funds, Goldman Sachs Europe CORE® Equity Portfolio and Goldman Sachs Global Small Cap CORE® Equity Portfolio have historically beaten their benchmarks and maintained a 1st Quartile ranking through an adaptive, style-neutral approach.

• This document is prepared by sources believed to be reliable at the time of publication; however, the Company does not guarantee the accuracy or completeness of such information.
• KF-EUROPE, KFEURORMF, and KF-SMCAPD are exposed to exchange rate risk, which may result in investors incurring losses or gains from foreign exchange movements and/or receiving proceeds lower than the initial investment.
• Investors should carefully study product features, conditions, returns and risks before making an investment decision. Past performance is not indicative of future results.