Robeco Asia-Pacific Equities I USD

Joshua Crabb is Lead Portfolio Manager and Head of Asia Pacific Equities. Before joining Robeco in 2018, Joshua was Head of Asian Equities at Old Mutual and Portfolio Manager at BlackRock and Prudential in Hong Kong. He started his career in the investment industry as Sector Analyst at BT Financial Group in 1996. Joshua holds a Bachelor's with Honors in Finance from the University of Western Australia and he is a CFA® charterholder. Harfun Ven is Portfolio Manager in the Asia Pacific team with a focus on cyclical sectors. Prior to joining Robeco in 2008, he was Portfolio Manager Japanese Equities at Alliance Trust. Harfun also managed Premier Alliance Trust Japan Equity, a top quartile ranked fund. Before that, he spent six years with Bowen Capital Management, managing both Japan-only and Asia-Pacific funds. He started his career in the investment industry in 1998. Having grown up in Japan, he fluently speaks Japanese, Cantonese and English. Harfun holds an MBA from Boston University and a Bachelor's from the University of Massachusetts.

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 following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on MSCI AC Asia Pacific Index (Net Return, USD).

In August, the Asia Pacific region experienced a 1.8% rise, despite initial steep losses due to a yen carry trade unwind and US recession fears. The DXY weakened, reflecting growth concerns and expectations of rate cuts, confirmed by Powell's comments at Jackson Hole. The market anticipates a 3% fed funds rate cut by the end of 2025. ASEAN markets within APAC, particularly the Philippines, Malaysia, Indonesia, and Thailand, significantly outperformed (8-10%) North Asia and India (-3% to +1%). Tech stocks, impacted by lower guidance along with stock sales by Warren Buffett, ended lower than in July. Healthcare emerged as the best-performing sector in APAC, driven by positive earnings and drug approvals. Earnings revisions remained broadly positive, with Indonesia and India leading net foreign inflows (USD 3 bln), while Taiwan and South Korea saw net foreign outflows (USD 4.6 bln).

Based on transaction prices, the fund's return was 2.87%. The portfolio outperformed in August. The most notable contributor was Indonesia, which we have highlighted as a potential clear beneficiary of lower US rates. Japan was second, followed by India, with the other ASEAN markets of Vietnam, the Philippines and Thailand rounding out the other top contributors. The main negative contributors were Taiwan and South Korea, where technology stocks were under pressure, although the mega cap TSMC continued to be resilient, relatively speaking. Malysia, the ASEAN market where we are underweight, dragged slightly as did Hong Kong and China. Sector-wise, industrials, consumer discretionary, consumer staples materials, real estate and energy aided performance. IT, healthcare, communication services, and healthcare were drags with a small detraction from utilities and financials.

In last month's outlook, we spoke about the events of early August and highlighted our view that – other than tech leadership – likely not much had changed. And that is more or less what has happened with the rebound. US equity markets are still quite expensive and that is being supported by anticipated rate cuts to 3% by the end of next year. The risk is that if these cuts occur, the economy may be quite a bit weaker than expected. Alternatively, if the economy stays strong, the magnitude of rate cuts may not come to fruition. A harder economic landing will likely see equities under pressure, while a soft landing will see bonds under pressure. What happens if the economy weakens a bit, inflation comes off a little, rates get cut, but not as much as is priced in by the market? That would be a good scenario for Asia. This would allow regional central banks that are not experiencing inflation to cut rates and stimulate their economies. This would be of particular benefit to ASEAN. The negative impact on cyclical earnings in the region would be muted – and valuations are not high.