Robeco Emerging Stars Equities I EUR

In April, the MSCI Emerging Markets Index had a strong recovery of 9.4% in euro terms, still lagging developed markets which were up 11.1%. Global equity markets were supported by a decline in new coronavirus infections in the most-affected European countries, a stabilization of new infections in the US and unprecedented fiscal and monetary support. Best emerging countries were Pakistan, India, Thailand, Chile and Taiwan, while Mexico, Turkey, Qatar and Brazil were the worst-performing countries. Within China, South Korea and Taiwan, the spread of the coronavirus is now well-contained, while most other emerging countries are experiencing a rising number of new infections. Most countries have implemented lockdowns, which will likely hurt economic growth numbers and earnings in the coming months. In China, severe lockdowns were in place in February and March, which led to a 6.8% contraction in first quarter GDP. In Brazil, Justice minister Moro resigned after interference from President Bolsonaro, worsening the political situation. Finally, oil prices were down during most of the month, with WTI even becoming negative, but they recovered towards the end of the month.

The fund is allowed to pursue an active currency policy to generate extra returns and can engage in currency hedging transactions.

In principle, the fund does not intend to distribute dividend and so both the income earned by the fund and its overall performance are reflected in its share price.

Robeco Emerging Stars Equities integrates ESG factors into its investment process by analyzing the impact of financially material ESG factors to a company’s competitive position and value drivers. We believe that this enhances our ability to understand existing and potential (long-term) risks and opportunities of a company. The impact of material ESG factors can be positive or negative, reflecting risks or opportunities, that ensue from a company’s ESG analysis. If ESG risks and opportunities are significant, the ESG analysis could impact a stock’s fair value and the portfolio allocation decision. In addition to ESG integration, Robeco also has an exclusion policy and conducts proxy voting and engagement activities focused on specific themes, such as climate change, aiming to improve a company’s sustainability profile.

Robeco Emerging Stars Equities invests globally in emerging economies. The focus is on companies which combine a sound business model and solid growth prospects with a reasonable valuation. The first step in portfolio composition is the top-down country selection, as research shows that country specific factors drive stock returns in emerging markets. The second step is in-depth fundamental analysis of companies and serves to identify stocks with the ability to outperform in the long run. Key items of our fundamental analysis are: growth prospects of sector, position of company within sector, competitive strength, financial health and strategy, corporate governance and management quality. We screen stocks with our proprietary quantitative model for attractive characteristics. On average, the fund invests in 35-50 companies and portfolio construction is independent of the index. Risk management is fully integrated in the investment process to ensure that positions meet predefined guidelines and the portfolio is diversified. The fund can protect investors from negative currency developments through active currency hedging. The fund aims to be fully invested. Robeco Emerging Stars aims to outperform the MSCI Emerging Markets Index over a full market cycle. This Sub-fund may invest in China A-shares via the QFII and/or a Stock Connect Programme which may entail additional clearing and settlement, regulatory, operational and counterparty risks.

Risk management is fully integrated into the investment process to ensure that positions always meet predefined guidelines.