Robeco Sustainable Global Stars Equities Z EUR

Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in information technology, real estate and portfolio construction. He has been in this role since 2009. Previously, he was responsible for managing the Robeco IT Equities fund within the TMT team. Prior to joining Robeco in 1999, he worked as a Portfolio Manager Japan at Achmea Global Investors (PVF Pensioenen). From 1995 to 1996 he was Portfolio Manager European Equities at KPN Pension Fund. He holds a Master's in Econometrics from Vrije Universiteit Amsterdam and he is a CFA® charterholder. Chris Berkouwer is Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on the low-carbon transition and on companies in energy, materials and industrials, and portfolio construction. He joined Robeco in 2010. Prior to that, he worked as an analyst for the The Hague Centre for Strategic Studies. He conducted country, industry and company research for various equity teams prior to joining the Global Equity team. He a holds Master's in Business Administration and International Public Management from the Erasmus University Rotterdam.

The fund is established in Luxembourg and is subject to the Luxembourg tax laws and regulations. The fund is not liable to pay any corporation, income, dividend or capital gains tax in Luxembourg. The fund is subject to an annual subscription tax ('tax d'abonnement') in Luxembourg, which amounts to 0.01% of the net asset value of the fund. This tax is included in the net asset value of the fund. The fund can in principle use the Luxembourg treaty network to partially recover any withholding tax on its income.

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual investors to consult their financial or tax adviser about the tax consequences of an investment in this fund in their specific circumstances before deciding to invest in the fund.

The fund incorporates sustainability in the investment process via exclusions, ESG integration, ESG and environmental footprint targets, and voting. The fund does not invest in issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

In a turbocharged mood, global equity markets rallied in January, opening the year up +5% (in EUR). In our humble opinion, this euphoric move, after a dreadful 2022, should be taken with a pinch of salt. Arguably, central banks are trying to strike a balance between fighting inflation and avoiding a hard economic landing, with the market interpreting recent policy commentary as becoming more dovish. Contrary to the message the stock market is sending, however, many data points such as falling PMIs, tight labor markets and lower construction spending, suggest the economic environment is still very shaky. Nonetheless, glimmers of hope drive price action for now, with the China reopening story clearly dominating bullish sentiment. Moreover, a mild winter causing gas prices to drop significantly in no time, helped improve sentiment on European stocks dramatically.

Based on transaction prices, the fund's return was 3.94%. Despite posting strong absolute returns, our strategy lagged in January from a relative perspective compared to the benchmark. In January, being underweight utilities helped the most, while strong stock picking in the technology sector also helped outperform. On a stock level, STMicroelectronics contributed the most, rallying after a strong set of results and providing optimistic guidance on the increased SiC chip demand it is seeing in the automotive space in particular. A strong rebound of last year's weaker performers such as Capital One and AMD contributed nicely to performance as well. Unfortunately, weaker returns in healthcare hurt the most during the month of January, with the sector altogether experiencing a steep inflection downwards. At the same time, we also were not able to fully keep up with the strong rebound in consumer discretionary, while not being exposed to the cyclical parts within materials also detracted from performance. Stocks that detracted the most in January include UnitedHealth, AstraZeneca, Eli Lilly and Colgate, all of which did very well last year, but were simply used as a source of cash in the fierce reversal trade at the start of 2023.

The wild card of hope from here remains China, which after spending much of the past years in rolling lockdowns, is now suddenly accelerating its reopening plans. Even though this shift is fraught with uncertainties and the occasional stop-and-go moves, at least the Chinese consumer is out of the doldrums for now, which should have positive global implications too. Elsewhere, mild winter weather and demand destruction means gas storage levels are at high levels in Europe, taking away some of the energy concerns, at least for now, that hampered the region so much in 2022. Meanwhile, after being at the forefront of the post-Covid recovery cycle, the US hiked itself into restrictive territory, the effects of which have not been felt fully. Despite some promising signs on the direction of inflation as of late, we should be mindful that inflation has never miraculously disappeared without a recession. So, from a global perspective, it seems two out of three major drivers of economic growth are turning for the better, while arguably the largest one stays at risk.