RobecoSAM Smart Energy Equities Z EUR

Roman Boner is Portfolio Manager of the RobecoSAM Smart Energy Equities strategy. Before joining Robeco in 2021, Roman was a Senior Portfolio Manager at Woodman Asset Management. Prior to that, he spent six years at Swisscanto (later part of Zurich Kantonalbank) as a Senior Portfolio Manager responsible for a sustainable global equity fund and co-manager of the thematic Global Water und Climate Fund. Roman started his career in 1996 at UBS working in different divisions including Private Banking, Asset Management and Trading. In 2003, he became Portfolio Manager at UBS Global Asset Management and, from 2005 onwards, focused on sustainable thematic equities strategies including Energy Efficiency and Climate change accounts. Roman graduated from the University of Applied Sciences Zurich in Economic and Business Administration and is a CFA® charterholder. Michael Studer is Co-Portfolio Manager of RobecoSAM Smart Energy Equities strategy and also covering thematic research with a focus on Technology within the Thematic Investing Energy/Mobility/Materials team. Before joining Robeco in 2021, he spent three years at Acoro Asset Management, where he was an investment manager focused on the IT sector (semiconductors, software and internet). Prior to that, he worked as a Senior Equity Analyst covering IT at Julius Bär, Bank J. Safra Sarasin and as a sellside analyst at Bank am Bellevue with a total 10-year tenure. Michael started his career in 2007 as a consultant for Strategy & Operations in the Financial Services Industry at Deloitte. Michael holds a PhD in Accounting and Controlling and a Master in Information and Technology Management from the University of St Gallen (HSG), as well as a Master in International Management from the Community of European Management Schools (CEMS). He also studied at the Rensselaer Polytechnic Institute (RPI) in Troy, New York (USA).

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 further the transformation and decarbonization of the global energy sector. The transformation and decabonization of the energy sector and sustainability considerations are incorporated in the investment process by the means of a target universe definition, exclusions, ESG integration, a carbon footprint target and voting. The fund only invests in companies that have a significant thematic fit as per Robeco's thematic universe methodology. Through screening on both Robeco's internally developed SDG Framework and Robeco’s exclusion policy, the fund does not invest in issuers that have a negative impact on the SDGs, are in breach of international norms or where products have been deemed controversial. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. The fund's weighted carbon footprint will be equal to or better than that of its Climate Transition Benchmark. 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.

Global stocks started the year very strongly. The trends from late last year continued, with the European and Chinese equity markets outperforming the USA. Tech stocks in the US, however, had their best start since 2001, after a weak relative performance last year. Inflation numbers in the US continued their downward path from elevated levels, which led to a lower long-term yield and gave the equity market valuation support. Energy prices, particularly in Europe, continued their downward trajectory, as a milder-than-usual winter coupled with an impressive cut in demand led to relatively high natural gas storage levels for the time of year. Overall, the macro data were better than feared and the widely expected recession might turn out less severe.

Based on transaction prices, the fund's return was 10.32%. With markets in risk-on mode, the Energy Management cluster was by far the best performer. The Energy Storage sub-cluster was driven by a big move of leading lithium producer Albemarle. Power semiconductor stocks Infineon and Onsemi also performed strongly, as demand from electric vehicles and renewable energy so far remains unimpacted by macro weakness. The Energy Efficiency cluster was the second-best cluster in the month. The Energy Efficient Transport sub-cluster had the best return, driven by the green hydrogen bellwether Plug Power. Big Data also performed strongly, with Lattice and Marvell both benefiting from expectations that the semiconductor downcycle will soon trough. Renewable Energy was a mixed bag after a stellar performance last year. Solar stocks continued their strong performance, benefiting particularly from a potential European IRA, whereas wind producer Vestas had another weak quarter. The Energy Distribution cluster lagged the overall very strong performance of the portfolio, as the Electric Networks sub-cluster underperformed due to its defensive characteristics of a regulated and inflation-protected asset base.

Signs are emerging that inflation in North America and Europe may have peaked, while growth fears are of increasing concern for investors. Accordingly, long-term interest rates are slowly retreating from last year's highs. While economic data will likely soften in the coming months, equity valuations have largely fallen back to their long-term averages. Slowing inflation and peak Fed hawkishness give some support to equity valuations. With China quickly easing its zero-Covid policy, we expect improving global supply chains going into 2023 and easing input cost inflation, which bodes well for a margin recovery of some of our core holdings, particularly in the Renewable Energy and Energy Efficiency clusters. Therefore, we are confident on the earnings outlook for our portfolio going into 2023, even with a more challenging macro backdrop, as high energy prices and the urgent need for energy independence act as catalysts for more investments in smart energy technologies. The fund management team remains constructive on the mid to long-term prospects for our holdings.