Robeco Emerging Stars Equities I EUR

In July, the MSCI Emerging Markets Index increased by 1.03% in euro terms, lagging the 2.79% increase for developed markets. Emerging equities drifted lower at the end of the month, as no progress was made in trade talks and elevated Fed expectations were pared down and eventually disappointed. Earnings results and economic data were mixed, with the Chinese activity data showing some early signs of bottoming. Latin America was the best region in EMs, led by Brazil on the back of the approval of the key pension reform bill and the beginning of a monetary easing cycle, with the central bank cutting interest rates by 50 basis points. Turkey was the best performing equity market in July, as the lira strengthened almost 4%. The Turkish central bank also started its easing cycle and cut its key policy rate from 24% to 19.75%. Mexico underperformed as investor confidence took a hit following the unexpected resignation of the Finance Minister on grounds of disagreement with the President on economic matters, raising the likelihood of a credit rating downgrade. Within the emerging sectors, information technology was the leader. The worst-performing sector turned out to be the materials sector.

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.