Global Head of Fundamental Equity
Get the latest insights
Subscribe to our newsletter for investment updates and expert analysis.
• Quarterly outlook
Equity outlook: Investing for the long haul
In our July equity quarterly we review more tech-led record highs in developed markets, buoyed by solid earnings, and in the emerging world we analyze how recent election surprises could impact the outlook.
Authors
Head of Emerging Markets team
Top keywords
Summary
- Tech giants generating cash and profitable growth
- Earnings save the day in developed markets
- Election season driving change in South Africa, Mexico and Brazil
This quarterly was finalized in the last week of June, when we held a Institutional Masterclass conference for our largest Asian clients. Most of the questions we got were about the ‘Magnificent 7’, which was no surprise as some remarkable moves happened that week. Amazon surged and passed the USD 2 trillion market capitalization mark. Nvidia shot up by 7% in a day, recovering what it lost 24 hours before. Since the market cap of the company is now over USD 3 trillion, that one-day move was equivalent in value to the total size of companies like Shell, Pepsico or L’Oréal. Do we think this trend is for real?
We do not see this as just hype, and we invest a significant part of our portfolios in technology companies. These companies are highly cash-generative and succeed in turning enormous investment programs into product innovation and profitable growth. As an example, Amazon, Google and Meta spent respectively USD 138, USD 78 and USD 66 billion on capex and R&D* in 2023. To put this in perspective, USD 138 billion is about the market value of Unilever.
However, technology is not the only trend or idea we invest in. Diversification is a key attribute of the long-term success of our portfolios. As Audrey Kaplan, portfolio manager for the Sustainable Global Stars strategy, writes in her article, our global team finds attractive stocks across multiple sectors. Have a look.
This quarter we are celebrating 30 years of investing in emerging markets at Robeco. Playing the right trends at the right time, with an eye on long-term value creation, has delivered an annualized 2% outperformance.* That is 340%* better than the benchmark over the period! Wim-Hein Pals is one of the founders of the EM Core strategy and still going strong as lead portfolio manager. His outlook on emerging markets is bullish, and he lays out strong arguments. Also in this edition, Jaap van der Hart, lead manager for the EM Stars strategy, discusses his favorite investment ideas.
In a special commemorative book, which is separately available, we look back at the main lessons from those 30 years and we look ahead at the most attractive trends and countries for the next decade. Please reach out for a copy, as it shows how we view the long-term opportunity in EM. It’s an interesting read for the summer. Happy holidays!
* Data by Bloomberg and Robeco performance measurement.
Download the publication
Don’t miss out
Important information
THIS WEBSITE IS SOLELY INTENDED FOR PROFESSIONAL INVESTORS, WHICH HAS THE MEANING ASCRIBED TO IT IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571 OF THE LAWS OF HONG KONG) AND ITS SUBSIDIARY LEGISLATION. Investment involves risks. Past performance is not indicative of future performance. The information contained in this website is provided for reference only and does not constitute investment advice or an offer or solicitation to buy or sell in any securities or to adopt any investment strategy. Investors should not base their investment decisions solely on the information provided on this website and are advised to seek independent advice (including advice on tax implications) before making any investment decisions. Investors should ensure they fully understand the risks associated with the investment products and should also consider their own investment objectives and risk tolerance level. The investment decision is yours. You should not invest unless the intermediary who sells you the investment products has advised you that it is suitable for you and has explained how it is consistent with your investment objectives. Please refer to the relevant offering documents or other legal documents for further details including the risk factors. This website is published by Robeco Hong Kong Limited which is regulated by the Hong Kong Securities and Futures Commission (“SFC”) (CE No. APU851). This website has not been reviewed by the SFC. No assurance can be given that the investment objective of any investment products will be achieved. No representation or promise as to the performance of any investment products or the return on an investment is made. The value of investments may fluctuate. Past performance, projections, or forecasts included in this website should not be regarded as guarantees or indications of future performance, and no express or implied warranty is provided. The contents of this website are based on sources believed to be reliable, but due to the nature of information delivery technology and the necessity of using multiple data sources, including third party content, their accuracy is not guaranteed. The opinions expressed are as of the date shown above and may change as market conditions evolve, and are subject to change without notice. These opinions may differ from those of other Robeco investment professionals. Robeco accepts no liability for any direct, indirect, or consequential loss arising from the use of this material or any comments, opinions, or estimates contained herein. Robeco has no duty to update this website or any website content. Materials on this website may not be reproduced, distributed, or published without prior written permission from Robeco. Unless otherwise specified, Source: Robeco.
