RobecoSAM Sustainable Food Equities G EUR

Stock markets had a strong start to the year, driven by surging technology and utility stocks. However, as the outbreak of the coronavirus in Wuhan, China hit the tape, markets erased previous gains. The food sector performed weaker than the MSCI, but the fund outperformed. The coronavirus could also weigh on demand for agricultural commodities, although the impact is expected to be rather local and temporary. The still impactful African Swine Fever in China has contributed to an attractive operating environment for animal protein producers. However, lower feed demand in China could reduce soybean demand by up to 1.4% of global production, according to estimates. Yet, extreme weather events like the bushfires in Australia, and potentially another wet and cold spring in the US and delayed planting in the following months, are putting pressure on food security. Accordingly, the outlook for the upstream sector remains neutral. Related to the push of many European food packaging companies to prioritize the use of renewable feedstock, this month China announced a ban on non-degradable plastic bags in major cities by the end of 2020, which is certainly a step into the right direction.

The fund is allowed to pursue an active currency policy to generate extra returns.

The fund distributes a dividend on an annual basis.

RobecoSAM Sustainable Food Equities integrates ESG at different stages of the investment process. We use sustainability performance rankings to focus our fundamental analysis on companies that have demonstrated superior sustainability performance compared to their peers. We then analyze 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 risks and opportunities of a company. If ESG risks and opportunities are significant, the ESG analysis could impact a stock’s fair value and the portfolio allocation decision. Throughout the investment process, we strive for a low environmental impact, as measured by GHG emissions, energy consumption, water use and waste generation, with the aim of realizing 20% better levels than the index. In addition to ESG integration, Robeco conducts proxy voting and engagement activities focused on specific themes, such as climate change, aiming to improve a company’s sustainability profile. Furthermore, the fund will not invest in companies exposed to the following controversial sectors or business practices: military contracting, controversial weapons, fire arms, UN Global Compact breaches, tobacco, palm oil and thermal coal, according to strict revenue thresholds.

Our investment philosophy is grounded in the core belief that the integration of ESG factors into a disciplined, research-driven investment process leads to better-informed investment decisions and better risk-adjusted returns through an economic cycle. Building on our proprietary data and research, we identify companies that generate a competitive advantage through sound business practices, efficiency improvements, and the creation of new solutions for the myriad challenges facing society over the coming decades. Taking a long-term investment perspective, we analyze companies’ business models, market positioning and growth potential, and evaluate their financial performance and valuation. Based on this fundamental assessment, we seek to uncover attractive investment opportunities and implement them in concentrated, conviction-based equity portfolios.

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