Robeco Sustainable European Stars Equities I EUR

Mathias Büeler is Head of Sustainable European Equities and Portfolio Manager for the Robeco Sustainable European Stars Equities strategy, as well as serving as a equity analyst covering the Financials, Real Estate, and Consumer Discretionary Sector. Prior to joining in 2011, Mathias worked as a sell-side equity analyst at Kepler Capital Markets for more than four years, covering Swiss banks and diversified financials. Previously, he was Head of Product Management Structured Products at Man Investments for two and a half years, where he started his career in 2004. Mathias holds a Master of Arts majoring in Business Administration from the University of Zurich and is a CFA® Charterholder. Oliver Girakhou is Portfolio Manager of Robeco Sustainable European Stars Equities strategy. He covers and leads the research in the Materials, Industrials Energy and Utilities industries within the Team. Prior to joining Robeco in 2014, he spent 6 years at Credit Agricole – Cheuvreux (later KeplerCheuvreux) as a sell-side equity analyst covering European industrial companies. He also gained first-hand business experience as an business analyst at the BMW Group where he worked in the China Strategy Department and he started his career in 2008. Oliver earned his Master in Social and Economic Science from Vienna University’s School of Economics and Business Administration, and his MBA from ESCP Europe.

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, negative screening, 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. In addition, a negative screen is used to exclude the 20% worst ESG scoring stocks from the investable universe. 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.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on MSCI Europe Index TRN.

October was another weak month for markets, with numerous factors forcing losses across different asset classes. The main driver was the attack by Hamas on Israel, which elevated geopolitical risks in the region and led to negative returns for global and European equities, while oil and gold prices rose, driven by concerns about a wider escalation of the conflict and demand for safe-haven assets. Another strong set of US economic data helped drive a renewed rise in longer-dated borrowing costs and added to fears about the impact of higher rates on the broader economy. The MSCI Europe declined by roughly -3.6% in October. More defensive sectors, such as utilities, insurance and energy, were among the best-performing sectors, while autos, banks and consumer discretionary declined more than the market on the back of cyclical worries. Software names caught up with global peers and delivered the strongest positive return this month. Elsewhere in healthcare, biotech and life sciences companies were dragged lower on the back of a more evident unwind of pandemic effects.

Based on transaction prices, the fund's return was -3.50%. In October, the fund outperformed the benchmark by just 14 bps. Selection was positive, driven by solid stock picking in communication services, materials and financials, while consumer staples and healthcare picks contributed negatively. Yet again, the structural underweight in the energy sector did not help and was the main driver of the negative allocation effects. The best single-stock contributors were Deutsche Telekom, Compass Group PLC and Linde. Deutsche Telekom reported solid numbers and continued to show strong operational performance. Compass keeps winning business in the catering outsourcing market. Linde continues to grow earnings on negative volumes, mainly driven by broad-based price attainment and strong cost discipline. The biggest single-stock detractors from the relative result were Lonza, JD Sports Fashion Plc and Epiroc AB. Lonza shares continued to slide after the CMD revealed a cut to its 2024-28 mid-term guidance. JD Sports shares were down on cyclical concerns in the US and Europe. Epiroc AB shares were down on the back of weakening demand in construction end markets as well as evidence of margin pressure driven by recent acquisitions.

The fund's strategy aims to make investments in high-quality companies with sustainable, differentiated business models taking a full-cycle view. Given that approach, we'd expect the fund to show its full strength when returns of individual stocks start to materially differ due to less overall market support. The fund's positions tend to be less driven by assumptions on general market trends, but much more by company-specific qualities that are likely to endure in both positive and negative environments. Driven by expected business resilience and comparably moderate valuations, our key convictions can give some comfort in volatile times.