Robeco Next Digital Billion I USD

Michiel van Voorst is Co-Portfolio Manager within the Trends Equities team. He has a focus on financials/fintech/next digital billion. In 2019, Michiel rejoined Robeco from Union Bancaire Privée in Hong Kong where he was CIO Asian Equities. Prior to that, Michiel spent 12 years at Robeco in several senior positions including senior portfolio manager Rolinco Global Growth fund and Robeco Asian Stars. Prior to joining Robeco in 2005, Michiel was Portfolio Manager US Equity at PGGM and Economist with Rabobank Netherlands. Michiel started his career in the investment industry in 1996. Michiel van Voorst holds a Master’s in Economics from University of Utrecht and is a CFA® charterholder. Bryan Satterly is Portfolio Manager Next Digital Billion and a member of the Robeco Trends Equities team. Prior to this role, Bryan was an investment manager for Robeco’s Private Equity group where he was responsible for group exposures in emerging markets, venture capital and co-investments. He joined Robeco in 2018. Before that he was an investment analyst in Washington D.C. for the Venture Capital Group at IFC, the World Bank Group’s private sector investment arm, investing into technology companies across emerging markets. He started his career in 2013 as an investment banking analyst at BMO Capital Markets in New York, working on a variety of equity, debt and M&A transactions in the Healthcare and Real Estate sectors. Bryan holds a Bachelor’s degree in Foreign Service from Georgetown University in Washington D.C.

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 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 Next Digital Billion Fund slightly underperformed the reference index. There was notable volatility due to various factors, such as regulations in the Chinese AI market and ongoing geopolitical tensions. The underperformance of Robeco Next Digital Billion was mostly driven by our exposure in Chinese tech. April markets in China were brutally shaken by the release of a draft regulation on generative AI by the Cyberspace Administration of China (CAC). This resulted in a broad sell-off of Chinese AI-beneficiaries' stocks, including our mega-cap holdings Tencent and Baidu. Meanwhile, on the other side of the world, our investments in Latin America showed strong momentum in April. Taking a more comprehensive view on the region, Brazil as a whole continues to experience extreme volatility, with rotating months of outperformance and weakness. While all those moving parts are clearly shaking up the Brazilian market, we see this volatility as an opportunity to trade around our positions and make profit.

Based on transaction prices, the fund's return was -2.43%. Internet platforms contributed negatively to performance during April, reverting the positive trend that was ongoing for the category since a couple of months. The largest detractor was Baidu, which was down 22%. The online consumer & media sector also made a negative contribution, as the Chinese market experienced weakness across all local stocks in the segment. In the mobility/e-logistics category, the largest holding, ESR Group, experienced a decline of 13% for the month, which contributed significantly to its negative performance. The B2B/enterprise-focused portion of the portfolio continued to contribute negatively this month, as our biggest position in this category, EPAM, dropped 6%. On the flip side, fintech and ICT & enablers made positive contributions, with the former driven by the announcement of two non-binding PE offers to take Network private.

We are confident about the strong operational performance demonstrated by our current portfolio holdings, even in the face of potential volatility in the near future. As demand begins to recover, we are taking proactive steps to position our portfolio strategically and capitalize on emerging opportunities in different geographic regions. Within our high conviction approach, we remain diversified across geographies. We continue to be excited by the long-term investment opportunities that our strategy offers and search for new investment ideas even in these turbulent times.