Robeco Sustainable Global Stars Equities I USD

Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in information technology, real estate and portfolio construction. He has been in this role since 2009. Previously, he was responsible for managing the Robeco IT Equities fund within the TMT team. Prior to joining Robeco in 1999, he worked as a Portfolio Manager Japan at Achmea Global Investors (PVF Pensioenen). From 1995 to 1996 he was Portfolio Manager European Equities at KPN Pension Fund. He holds a Master's in Econometrics from Vrije Universiteit Amsterdam and he is a CFA® charterholder. Chris Berkouwer is Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on the low-carbon transition and on companies in energy, materials and industrials, and portfolio construction. He joined Robeco in 2010. Prior to that, he worked as an analyst for the The Hague Centre for Strategic Studies. He conducted country, industry and company research for various equity teams prior to joining the Global Equity team. He a holds Master's in Business Administration and International Public Management from the Erasmus University Rotterdam.

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 via exclusions, ESG integration, ESG and environmental footprint targets, 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 fundamental investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

Never a dull moment in global equity markets, though this month's muted price action proved the opposite (flat in EUR, +2% in USD). Beneath the surface we have seen quite some stock dispersion on the back of 2023 first-quarter earnings results, with misses punished severely and only strong beats being rewarded. With over 50% of companies having reported thus far, it seemed most earnings reports did clear a low bar and backstopped markets for now after renewed macro and banking jitters from the previous month. Interestingly, many mega-cap tech and longer duration names continued their comeback, offsetting much of the damage from 'old economy' complexes that have been struggling year-to-date. Also, the strong performance of, for example, high-end luxury and conventional defensive stocks is concurrent, with an overall shift into quality pricing power plays and 'flight to safety'. Companies indeed sound cautious on demand and see cracks forming, with some seeing their all-time high backlog drying up rapidly, meaning less room for pricing from here onwards.

Based on transaction prices, the fund's return was 1.83%. April was a decent month for our strategy, with a positive absolute return and a slight positive excess return versus the benchmark. On a sector level, communication services, healthcare and materials contributed the most to performance, while energy and technology lagged during the month. On a stock level, Eli Lilly was the largest performance contributor after posting another strong earnings report. Another strong performer was consumer health company Haleon Plc, which saw a resurgent flu season boost sales of respiratory health and pain relief. Meta Platforms continued its comeback, with investors rewarding the company's change in tac by focusing on returns, while its earnings report also mentioned an impressive rebound in growth. In terms of negative performance contributors during April, STMicro handed back some of its strong performance from earlier in the year, as concerns around the company currently 'overearning' resurfaced after its earnings results. Another winner from last month that saw its fortunes reverse in April was Alibaba Group, with investors losing hope that the large restructuring announced will materialize anytime soon.

Interestingly, Europe seems to have become a relative safe haven with the US facing more specific risks ahead, such as a large come down from massive Covid liquidity, risky commercial real estate, the regional banks saga, debt ceiling debates and continued political divisions. The valuation differential between both regions with the US on 18x forward earnings versus 12x for Europe, might argue in favor of Europe since a long time. Still, large issues at play in the US, such as a hard landing or a severe contraction in credit markets, undoubtedly spill over to Europe too, outweighing any modest tailwind it gets from China's reopening and current 'easy comps'. While we do not own a crystal ball showing interest rate pathways and where they might peak out, or even start to ease down, we do think it makes sense to see an extended pause in any rate movement at some point. The status quo is fragile and the flurry of data points do imply calmer rate markets and equity markets staying somewhat in limbo. This means investors like us continue to be comfortable with sticking around in the quality corner for longer.