RobecoSAM Smart Energy Equities X CHF

Roman Boner is Portfolio Manager of the RobecoSAM Smart Energy Equities strategy. Before joining Robeco in 2021, Roman was a Senior Portfolio Manager at Woodman Asset Management. Prior to that, he spent six years at Swisscanto (later part of Zurich Kantonalbank) as a Senior Portfolio Manager responsible for a sustainable global equity fund and co-manager of the thematic Global Water und Climate Fund. Roman started his career in 1996 at UBS working in different divisions including Private Banking, Asset Management and Trading. In 2003, he became Portfolio Manager at UBS Global Asset Management and, from 2005 onwards, focused on sustainable thematic equities strategies including Energy Efficiency and Climate change accounts. Roman graduated from the University of Applied Sciences Zurich in Economic and Business Administration and is a CFA® charterholder. Michael Studer is Co-Portfolio Manager of RobecoSAM Smart Energy Equities strategy and also covering thematic research with a focus on Technology within the Thematic Investing Energy/Mobility/Materials team. Before joining Robeco in 2021, he spent three years at Acoro Asset Management, where he was an investment manager focused on the IT sector (semiconductors, software and internet). Prior to that, he worked as a Senior Equity Analyst covering IT at Julius Bär, Bank J. Safra Sarasin and as a sellside analyst at Bank am Bellevue with a total 10-year tenure. Michael started his career in 2007 as a consultant for Strategy & Operations in the Financial Services Industry at Deloitte. Michael holds a PhD in Accounting and Controlling and a Master in Information and Technology Management from the University of St Gallen (HSG), as well as a Master in International Management from the Community of European Management Schools (CEMS). He also studied at the Rensselaer Polytechnic Institute (RPI) in Troy, New York (USA).

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's sustainable investment objective is to further the transformation and decarbonization of the global energy sector. The transformation and decabonization of the energy sector and sustainability considerations are incorporated in the investment process by the means of a target universe definition, exclusions, ESG integration, a carbon footprint target and voting. The fund only invests in companies that have a significant thematic fit as per Robeco's thematic universe methodology. Through screening on both Robeco's internally developed SDG Framework and Robeco’s exclusion policy, the fund does not invest in issuers that have a negative impact on the SDGs, are in breach of international norms or where products have been deemed controversial. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. The fund's weighted carbon footprint will be equal to or better than that of its Climate Transition Benchmark. 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.

After a very strong first quarter of the year, the equity market consolidated in April close to its peak of the year within a relatively tight trading range. Underneath the headline index performance numbers, dispersion was quite high. Defensive sectors outperformed, while the more cyclical industries underperformed. Within technology mega-cap software and internet names outperformed, while semiconductor companies underperformed strongly. On macro, April was a bit of the same as the last few months, with inflation numbers slowly coming down, but they remain too high by any standard, while the overall economy remained resilient. However, hard-landing fears persist as financial conditions continue to tighten following the recent banking turmoil.

Based on transaction prices, the fund's return was -8.39%. The Energy Distribution cluster delivered a good absolute performance to the portfolio thanks to the defensive Electric Networks sub-cluster that benefited from its regulated and inflation-protected asset base. Equipment suppliers Schneider Electric and Quanta Services performed very well in an overall more difficult environment. The Renewable Energy cluster performed in line with the overall fund. Solar was the weakest sub-cluster in April, as the market is awaiting more clarity on the implementation of the Inflation Reduction Act in the US and the Green Industrial Plan in Europe. The Energy Efficiency cluster was weak across the board, with the worst performance coming from the Transportation and Big Data sub-clusters. Within transportation, EV maker BYD had a slightly positive performance though in a generally weak environment for EV makers. After some strong months, the Big Data sub-cluster traded down in a market risk-off environment. Energy Management was the weakest cluster after months of strong performance. Especially the Power Semiconductor sub-cluster suffered from investors locking in profits at strong YTD performers on fears of easing supply conditions in auto.

Inflation in North America and Europe has likely peaked, but fears remain that inflation will stay higher for a bit longer. The recent banking crisis will likely lead to some further tightening of financial conditions, even without the Fed becoming more restrictive. Long-term interest rates started to reflect this new outlook and are trading below recent peaks. This should give valuation support for quality growth companies with sound balance sheets. With China recovering from the Covid downturn, we expect gradually improving global supply chains through 2023 and easing input cost inflation. Therefore, we are confident on the earnings outlook for our portfolio going into 2023, even with a more challenging macro backdrop, as high energy prices and the urgent need for energy independence act as a catalyst for more investments in energy technologies. The fund management team remains constructive on the mid to long-term prospects of our holdings.