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.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on MSCI World Index TRN.

During October, the MSCI World continued its losing streak, falling by -2.7% (in EUR). All sectors apart from utilities posted negative returns, with the weakest ones being consumer discretionary, energy and industrials. On the geopolitics front, following the unprecedented attack by Hamas on 7 October, Israeli forces have launched ground operations in Gaza. On the economics front, US Q3 real GDP growth came in very strong at 4.9% (annualized QoQ), fueled mostly by private consumption. On the US monetary front, September CPI came in above expectations driven by energy prices, while core inflation's composition was also not very favorable. Fed chairman Powell indicated that the higher long-term yields help the Fed's job. In Europe, the ECB decided to keep its policy rate unchanged during its latest meeting, a decision that was taken with unanimity. Eurozone inflation fell to 2.9% in October, which is the lowest monthly inflation figure over a period of more than two years. On the corporate side, the current earnings season includes several hints of an economic slowdown.

Based on transaction prices, the fund's return was -1.86%. Among the largest contributors was Colgate-Palmolive, which once again reported solid numbers. Input cost moderation and sequential volume improvements after strong price increases support our thesis of an underappreciated high-quality franchise. Another large contributor was Microsoft, which positively surprised the market with solid growth within its cloud business Azure and continued operating margin expansion. Not holding Tesla also contributed positively. Among the largest detractors was On Semiconductor, which reported good numbers for 23Q3, but disappointed with its 23Q4 guidance. The company's silicon carbide (SiC) business weakening led to a meaningful cut of its FY SiC revenue growth forecast. The reason for the cut is linked to a reduction in demand from one OEM, which should be Tesla, and raises questions about the durability of the company's long-term supply agreements. Another large detractor was AstraZeneca. This is probably driven by investors' concerns about the quality of the company's pipeline.

Overall, economic conditions remain challenging. Next to sharply increasing geopolitical risks, most economies are facing tighter lending conditions, very high interest rates and inflation levels that, despite some easing, are still well above the central bank targets. Based on history, we continue to believe that the market is too optimistic and underestimates the stickiness and the volatility of inflation at the currently still elevated levels. With market valuations still remaining well 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 our fund maintained its defensive positioning. In the meantime, we continue to look for companies whose risk-return profile turned attractive due to overreactions in the market and we are becoming more constructive lately, at least in certain areas. 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.