RobecoSAM Smart Materials Equities F USD

Pieter Busscher is Portfolio Manager of the RobecoSAM Smart Materials Equities and RobecoSAM Smart Mobility Equities strategies. He focuses on sustainable growth opportunities in new materials, efficiency technologies, reuse of resources and new mobility solutions. He started at Robeco as a Deputy Portfolio Manager for the Sustainable Water strategy. Pieter became the Lead Portfolio Manager for Smart Materials in 2009 and Deputy Portfolio Manager for Smart Mobility at launch in 2018. Prior to joining Robeco in 2007, he began his career at Credit Suisse Asset Management in Zurich. He studied International Business at RSM Erasmus University and Banking and Finance at the University of St. Gallen and is a CFA® charterholder.

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 0.05% 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.

The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise 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 help mitigate the resource scarcity challenge within industries while supporting economic growth. Resource scarcity 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.

In February, the strongest performance came from Smart Manufacturing, where Robotics and Lasers as well as Automation and Process Control benefited from positive earnings, while Software was below average. Advanced Materials, where we saw Functional Materials outperforming, was weaker. Process Technologies was mostly weaker, with Recycling outperforming. Transformational Materials was below average, Efficient Lighting outperformed on OLED companies, and Energy Storage Materials was weaker.

Based on transaction prices, the fund's return was -3.05%. The Advanced Materials cluster had a slightly weak performance, which was to a large extent driven by the weaker performance of the Strategic and Specialty Metals sub-cluster. Boliden, a Swedish metals and mining company, saw its share price decline by 5% following 22Q4 results that were weaker than expected on operating earnings, but a beat on FCF and dividend. Efficient Building Materials had a flat performance, but was very mixed on an underlying basis. Smart Manufacturing was the strongest cluster in February. Robotics and Lasers companies with higher exposure to the Chinese reopening, like IPG Photonics and Yaskawa, outperformed over the month. Process Technology was the weakest cluster in February. The negative performance was driven by the pullback of January's top performers National Instruments (Analytical Instruments), Befesa (Circular Systems) and Plug Power (Cleaner Industrial Solutions). On the positive side, waste-to-product company Renewi (Recycling & Disposal) was up, following better-than-expected results and consensus estimates upgrades.

Strong secular growth themes related to decreased emissions (net zero targets) and more efficient materials and production techniques (e.g. smart manufacturing) are impacting their respective sectors. More specifically, efficient building materials, 3D software, the Internet of Things and robotics companies are presenting attractive investment opportunities. In the Recycling and Circular Systems investment cluster, which focuses on reusing, recycling and repurposing plastics, attractive opportunities are leading to more circular business models.