Robeco Chinese A-share Equities D USD

The Chinese Equities investment team consists of five investment professionals with an average experience of 10 years, combining complementary skills and worldwide investment backgrounds. The team’s portfolio managers place local insights into the context of a wider regional and global perspective. Local presence in Hong Kong and Shanghai allows for optimal coverage of both off- and onshore markets, respectively. Mr. Lu is the Head of Investments China. He is responsible for Robeco’s overall investments and research activities in China. Before joining Robeco in Nov 2015, Mr. Lu worked as a Portfolio Manager at Norges Bank Investment Management in Shanghai from 2011 to 2015, and as an analyst in Hong Kong from 2009 to 2011. Prior to that, he worked at the M&A department of Morgan Stanley Asia Ltd. Mr. Lu started his career as an engineer at Motorola, Inc. in 2000 and subsequently held several managerial positions. Mr. Lu is a native Mandarin Chinese speaker. He holds an MBA with Distinction in Finance and Marketing from the Kellogg School of Management at Northwestern University in the US. He also holds a Master’s degree in Electrical Engineering and Computer Science from the University of Illinois in the US and a Bachelor's degree in Biochemistry from Fudan University in China.

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 incorporates sustainability in the investment process through exclusions, ESG integration, engagement 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 investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

The economy in China is gathering speed. The mobility number during the Lunar New Year holiday week showed that the Covid peak is largely over in the country, probably faster than was expected back in December. China's January official manufacturing PMI bounced back to 50.1 from 47 in December, and its non-manufacturing PMI increased from 41.6 to 54.4, both returning to expansion territories. The stronger non-manufacturing PMI is driven not only by a sharp rise in travel and hospitality services but also by construction. The easing Covid-19 control measures clearly benefited service activities more here. Manufacturing is recovering more slowly, but stronger new orders point to an impending acceleration.

Based on transaction prices, the fund's return was 7.98%. Robeco Chinese A-share Equities underperformed its reference index by 1.4% in January. Negative contributions came from consumer staples and industrials. Positive sector contributions came from information technology and financials. The main detractors were Tsingtao, LBX Pharmacy and Spring Airlines. The main contributors to performance were Hangzhou First Applied Material, Luxshare Precision and Contemporary Amperex.

We are turning to a more constructive view on China's market, as multiple positive developments point to recovery and reduce the risk premium. As China emerges from the pandemic, we expect that the release of pent-up demand will help to fuel a meaningful rebound in services consumption, on the back of excess savings accrued over the past three years. In the long run, although economic growth numbers will inevitably continue to moderate over the years, this slowdown will be largely compensated by higher-quality growth. In our approach we follow a barbell strategy: on the one hand we remain defensive, and on the other we focus on structural growth and reform drivers of the Chinese economy while selectively investing in structural winners within the themes. We think value currently lies in the long-term themes including the green economy, technology innovation and industrial upgrade.