RobecoSAM Global SDG Equities Z EUR

Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is also Co-Head of Robeco’s Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in the information technology, real estate & communication services sectors, as well as 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 Japanese Equities 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. Christoph Wolfensberger is a portfolio manager at Robeco within the Global Equity team with over 10 years of experience in Sustainability Investing. He is also the deputy portfolio manager for the Global SDG Equities strategy.  Prior, Christoph was also a Quantitative Analyst covering Sustainability/Impact Investing within Robeco’s Products & Engineering Team with a strong focus on customized solutions as well as portfolio optimizations. Prior to joining in 2011, he served as an Intern on the ESG Research team for six months. He holds a Master’s of Science Degree in Chemistry and Business Studies from the University of Zurich.

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’s sustainable investment objective is to advance the United Nations Sustainable Development Goals (SDGs). SDG and sustainability considerations are incorporated in the investment process by the means of a target universe, exclusions and ESG integration. The fund solely invests in stocks issued by companies with a medium or high positive impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). Furthermore, the fund does not invest in stock 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 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 July, the MSCI World Index increased by 2.5% (in euros). All sectors posted positive returns, with energy, communication services and financials being the top performers, while consumer staples, utilities and healthcare lagged the most. On the corporate side, most US companies have already published their quarterly results, with the majority of them beating expectations in terms of both the top and bottom line. On the economic front, US Q2 YoY GDP came in surprisingly strong at 2.4%, while the Eurozone returned to growth over the same period, increasing market participants' bets on a soft landing scenario. On the monetary front, the Bank of Japan, after a strong June inflation report, surprised the markets by tweaking its yield curve control policy, triggering an upward movement in the 10-year Japanese govt. bond yield. In the US, the Fed hiked as expected, while its preferred core inflation measure for June, which was published after its meeting, came in slightly below expectations. Similar to the US, headline price pressure eased in Europe, though core inflation remained stubbornly high. The ECB hiked as expected, but provided rather dovish messaging during its latest meeting.

Based on transaction prices, the fund's return was 1.68%. Over the last month, the fund underperformed the MSCI World Index, driven by a combination of negative stock selection in industrials, financials and communication services as well as a negative allocation effect due to our zero exposure to energy and the substantial overweight in healthcare. Among the largest detractors was Merck & Co, which we believe suffered due to higher R&D charges linked to the closure of the Prometheus acquisition. Next to Merck & Co, stocks that we do not own, including Alphabet and Meta, were among the largest detractors. Among the largest contributors was ON Semiconductor. Following its good results at the beginning of May, the fear of a peaking cycle for automotive chips continued to fade, while the industrial end market has also remained healthy so far. Another large contributor was KB Financial, as the stock experienced a strong run after the announcement of its 23Q2 results. KB also announced a share buyback program, something that came in as an additional positive surprise.

Although Q2 GDP figures for both the US and the Eurozone were positive surprises, the overall economic conditions remain challenging, with tighter lending conditions on the back of the well-documented failure of major US banks, very high interest rates and inflation levels that, despite some easing, are still well above the central bank targets. Yield curves in major economies remain inverted. Based on history, we continue to believe that the market is too optimistic and underestimates the stickiness of inflation at the current still elevated levels. With market valuations remaining above depressed levels and the balance of risks for global equity markets overall still looking skewed to the downside, it is hard to get overly excited and hence we maintain our defensive positioning. In the meantime, we continue to look out for companies whose risk-return profile turned attractive due to overreactions in the market and we remain confident in our bottom-up approach that focuses on picking companies with strong over-the-cycle fundamentals and resilient business models to identify high-quality stocks at attractive valuations.