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 February, emerging markets declined by 4.2% in euro terms, performing worse than developed markets, which were down 0.1%. One important driver was the increase in US bond yields, as the outlook for the potential Fed interest rate cuts became less optimistic. Also, geopolitical risks between China and the US came to the foreground again, among others due to the Chinese balloon flying over the US. China was therefore one of the worst-performing countries in February, together with Thailand, Colombia, Brazil, South Africa and Saudi Arabia. The best-performing countries were the Czech Republic, Greece and Turkey. Turkey experienced a very severe earthquake, but the market was higher as the government instructed banks and state pension funds to support the equity market. After lots of selling in 2022, foreigners plowed more than USD 35 billion into EM equities in January and February 2023.

Based on transaction prices, the fund's return was -4.03%. The fund outperformed the benchmark (MSCI EM) in February, supported by both country allocation and stock selection. Positive country allocation came from our overweight positions in Greece, Indonesia and Mexico, and the underweight positions in ASEAN. Positive stock selection was driven by strong stock picking in Greece, China, India and Mexico. The only detractors from a stock selection perspective were Poland and South Africa. Greek banks Alpha Services and National Bank of Greece performed very well. In China, the underweight in the internet platforms and the overweight position in appliances manufacturers Gree Electric and Haier Smart Home contributed positively. Indian banks did particularly well and our zero weight in the Adani-related underperformers led to a nice positive contribution to alpha. Our Mexican holdings in airport operator Asur, in steel producer Ternium and in financial company Grupo Banorte performed strongly.

Until Russia normalizes again, its equity market will remain irrelevant for EM investors. However, the war also affects the world and the global economy. Energy prices have risen, inflation is at elevated levels, and Europe will reduce dependency on Russian gas and spend more on defense. Geopolitical risks continue to be high. At the start of 2023 we came to a post-Covid world, as China got rid of all Covid-related restrictions. The macroeconomic fundamentals in emerging countries are relatively strong, with much lower inflation prints and current accounts that look much better than those in developed countries. Given the equities' correction in 2022, global equity market valuations did become less expensive. Moreover, we do think that emerging markets are attractively valued relative to developed markets, trading at a more than 30% discount, based on earnings.