Robeco Global Consumer Trends Z EUR

Jack Neele is Portfolio Manager of the Robeco Global Consumer Trends strategy and member of the Trends Equities team. Jack started his career in the investment industry in 1999 and prior to joining Robeco, he was a Global Equity Portfolio Manager at Fortis MeesPierson. He holds a Master’s in Econometrics from Erasmus University Rotterdam and is a Certified European Financial Analyst. Richard Speetjens is Portfolio Manager of Robeco Global Consumer Trends strategy and member of the Trends Equities team. He has managed the strategy since December 2010. He joined Robeco as a Portfolio Manager European Equities in 2007. Previously, Richard was Portfolio Manager European Equities at Van Lanschot Asset Management and at Philips Investment Management. Richard has a Master's in Business Economics and Finance from Maastricht University 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 0.01% 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 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.

Most of the world's markets turned down last month, with equities, bonds and commodities all dipping after the strong start to the year. While the Federal Reserve did raise rates by another 25 basis points, the expectation was that this was one of the final hikes before an eventual pivot to lower rates. However, a spate of stronger-than-expected US economic data changed the picture completely, with markets now anticipating higher peak rates. In Europe, the ECB raised rates by 50 basis points. The S&P 500 Index lost 2.6% in February, while the tech-heavy Nasdaq outperformed with a relatively small 1.1% drop. European stocks in the FTSE Eurotop 100 Index rose 1.3%, with several European markets touching all-time highs. The TOPIX Index also posted a small 0.9% gain. Finally, emerging market stocks dropped 6.5% as Chinese stocks in Hong Kong reversed course.

Based on transaction prices, the fund's return was 0.74%. Stocks exposed to the Digital Transformation of Consumption theme continued their very strong start. Some of the strength actually caught us by surprise a little bit. Even though we had expected some of the beaten down stocks from last year to stage a bit of a recovery, the persistent strength lasted longer than we expected. Our Emerging Middle Class trend again made a neutral contribution last month, as gains in Ferrari and MercadoLibre were offset by losses in our Chinese e-commerce holdings like PDD and Alibaba. The Chinese e-commerce holdings were pressured by signals that the competitive environment was getting tougher after peer JD.com indicated it was open to using subsidies to drive sales. Our Health & Wellbeing trend made a small negative contribution. Defensive stocks continue to underperform, as rising interest rates translate into lower valuations for stable growth stocks.

A regime of rising interest rates presents a more challenging environment for companies with high long-term growth potential. Luckily, central banks have indicated that we are nearing the end of interest rate increases and high but easing levels of inflation may support investor sentiment in the first half of the year. We remain steadfast in our belief that long-term investors should focus on high-quality businesses with valuable intangible assets, low capital intensity, high margins and superior returns on capital. Companies with these traits have historically delivered above-average returns, while offering downside protection in volatile market environments. Firms that exhibit these characteristics are poised to deliver healthy revenue and earnings growth in the future and we therefore expect them to continue to generate attractive long-term returns. We believe premium valuations for these businesses are justified given the quality of their business models, the high levels of earnings growth and the sustainability of their franchises. We continue to have a positive long-term outlook for our investments.