RobecoSAM Net Zero 2050 Climate Equities D USD

Chris Berkouwer is Co-Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on companies in the energy, materials and industrials sectors, climate 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. Yanxin Liu is Portfolio Manager and member of the Global Equity team. She is responsible for fundamental global equities with a focus on all sectors and on portfolio construction. Yanxin spent 11 years with our Emerging Markets Equity team, prior to joining the Global Equity team in 2022. Within the Emerging Markets team her focus was on all sectors in Greater China. Prior to that, Yanxin worked for DSM Pension Services in the Netherlands as an analyst focusing on US large-cap equities. Yanxin has a Master’s in Finance from the Erasmus University Rotterdam and a Bachelor’s in Financial Accounting from Nankai University in Tianjin, China. She became a CFA® charterholder in 2015 and is a native Mandarin speaker.

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 contribute to keeping global temperature rise well-below 2°C by reducing the carbon footprint of the fund. Climate change and sustainability considerations are incorporated in the investment process via exclusions, ESG integration, as well as voting. Firstly, the fund does not invest in stock issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. This includes activity-based exclusions of Article 12 of the EU regulation on Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks as applicable. Secondly, the fund focuses on investing in companies that have set Net Zero goals by 2050 and examines other financially material ESG factors in the portfolio construction. Thirdly, by restricting the GHG emissions, the carbon footprint of the fund is made lower than that of the Climate transition benchmark to ensure alignment with the desired decarbonization trajectory of 7% year on year. Further, 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.

Based on transaction prices, the fund's return was 2.05%. During the month of July, our strategy posted a small absolute return, slightly lagging the climate transition index return. On a sector level, our (natural) underweight in healthcare, and overweight and positioning in consumer staples helped the most from a relative point of view, while our positioning in technology and financials detracted the most from performance. On a stock level, Chinese EV and plug-in hybrid car maker BYD Co. continues to power on, stealing market share from Tesla in China, while also making successful inroads into Europe. In July, we also had some detractors from performance, most notably insurance broker and climate risk specialist Aon Plc, after an earnings miss and slowdown in organic growth. Also, the fact that Aon Plc has lagged peers for several quarters in a row now in terms of growth due to its business mix is causing some concern with investors. And SolarEdge detracted yet again during the month, dragged down in sympathy with peers Sunnova and Enphase on worries of too high inventory levels against a weakening demand backdrop.

We believe there are no magic bullets that miraculously solve all the climate challenges that we face. Almost all solutions have their pros and cons, are not always supported by everyone, and might sometimes be controversial but potentially necessary. As recently pointed out by the IPCC's new head, Jim Skea, if you want to move forward in the desired direction, apocalyptic messages of "global boiling", as per UN SG António Guterres, will not help. In fact, alarmist communication is an important paralyzing factor, preventing people from taking the right measures to get things done. Moreover, we have to realize that the transition to net zero will take decades, so to base all investment allocation decisions on only a five-year or a '2030' window, is sheer capital destruction. Our strategy continues to look for the right mix of practical climate solutions, the brains and muscles so you will, that really have the best shot at net zero ultimately.