Robeco Emerging Markets Equities F USD

Wim-Hein Pals is Head of the Robeco Emerging Markets Equity team and Lead Portfolio Manager of the Global Emerging Markets Core strategy. Previously, he was Portfolio Manager Emerging European and African equities and Portfolio Manager Emerging Asian equities. Wim-Hein started his career in the investment industry at Robeco in 1990. He holds a Master's in Industrial Engineering and Management Sciences from Eindhoven University of Technology and a Master's in Business Economics from Tilburg University. Dimitri Chatzoudis is Portfolio Manager Institutional Emerging Markets Accounts. As a Research Analyst he covers the team’s investments in Mexico. Before joining Robeco in 2008, he was Portfolio Manager Eastern European and Global Emerging Markets at ABN AMRO. He started his career in the industry in 1993. Dimitri holds a Master’s in Industrial Engineering from Eindhoven University of Technology and is a Certified European Financial Analyst. Dimitri is also fluent in Greek. Jaap van der Hart is the Lead Portfolio Manager of Robeco’s High Conviction Emerging Stars strategy. Over time, he has been responsible for the investments in South America, Eastern Europe, South Africa, Mexico, China and Taiwan. He also coordinates the country allocation process. He started his career in the investment industry in 1994 at Robeco's Quantitative Research department and moved to the Emerging Markets Equity team in 2000. Jaap holds a Master's in Econometrics from Erasmus University Rotterdam. He has published several academic articles on stock selection in emerging markets. Cornelis Vlooswijk is Lead Portfolio Manager and Research Analyst African Equities. Previously, he worked for Robeco as an investment strategist focusing on North America and Emerging Markets since 2005. Before joining Robeco in 2005, he worked for Credit Suisse First Boston as an Investment Banking Analyst, focusing on the transport and logistics sector. He started his career in the financial industry in 1998. Cornelis holds a Master’s in Economics from Erasmus University Rotterdam 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 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.

In July, emerging markets rose 5.1% (in euro terms), thereby outperforming their developed counterparts, which increased 2.3%. Positive soundbites from China lifted sentiment and drove the markets in general. Regulatory scrutiny on large internet-based platforms seems to be ending, while more support and pledges to restore the health of the property sector were well received. Further comments on boosting consumer confidence and solving the local government debt issue also supported the Chinese market. Nickel, copper and aluminum jumped on this news. Sentiment was further supported by the better-than-expected inflation-related economic numbers in the US, increasing the odds that the Fed is nearing the end of its rate-hike cycle. Countries that performed strongly were China, Malaysia, South Africa and Turkey. Markets that lagged were Hungary, India, Indonesia, Saudi Arabia and Taiwan. Crude oil prices rose on Saudi Arabia extending a voluntary output cut, after which Russia announced a reduction of its own exports. Inflows into EM equity funds accelerated from under USD 1 billion in June to over USD 2 billion in July. Cumulative flows are almost US 40 billion year-to-date.

Based on transaction prices, the fund's return was 4.40%. The fund underperformed the benchmark (MSCI EM) in July. Country allocation was neutral, but stock selection contributed negatively. The biggest positive contributions to the country allocation result came from being underweight in poorly performing Saudi Arabia and India and being overweight in outperforming Vietnam. Negative contributions to country allocation came from the underweight position in well-performing China and Malaysia and being overweight in lagging Indonesia. Stock selection was strong in Mexico, where our bank holding Banorte rallied in July. In Taiwan, stock selection was positive, as cloud server solutions provider Wiwynn rose significantly. In Greece, stock selection was good due to the strong performance of bank Alpha. Stock selection in July was weak in China, as we did not own rallying Meituan (food delivery) and Pinduoduo (online retail), while our holdings Xinyi Solar (solar panels) and ENN Energy (gas distribution) lagged. Stock selection was also negative in India, with IT services provider HCL lagging the market. In South Korea, stock selection was negative, as Samsung Electronics and automotive producer Hyundai underperformed.

The global environment is still challenging for equity markets, as inflation remains high and global central banks have continued to raise interest rates. This has led to financial stress for some European and US banks, and global growth is likely to slow down. However, emerging markets seem well positioned, as inflation is much lower in many countries, they were earlier in hiking interest rates in this cycle and growth in China has picked up after the end of the zero-Covid policy. After last year's correction, market valuations have become attractive, and EM is now trading at valuation levels that are lower than its long-term averages. In addition, emerging markets are attractively valued relative to developed markets with discounts of around 30% based on earnings multiples.