Robeco Asian Stars Equities F EUR

Vicki Chi is Portfolio Manager in the Asia Pacific team with a focus on defensive sectors. Prior to joining this team in 2014, she was an Analyst in the Robeco Emerging Markets team where she covered Chinese stocks in the telecom and banking sector. Vicki started her career in 2006 at Robeco. She is a native speaker of Mandarin Chinese and holds a Master’s in Business Administration from Erasmus University Rotterdam. She also is a CFA® charterholder. Joshua Crabb is Lead Portfolio Manager and Head of Asia Pacific Equities. Before joining Robeco in 2018, Joshua was Head of Asian Equities at Old Mutual and Portfolio Manager at BlackRock and Prudential in Hong Kong. He started his career in the investment industry as Sector Analyst at BT Financial Group in 1996. Joshua holds a Bachelor's with Honors in Finance from the University of Western Australia and he 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 0.05% 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 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.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 AC Asia ex Japan Index (Net Return, EUR).

Asian markets dropped 3.9% in October, underperforming the world index, which dropped 3.1%. Investors were concerned about the 'higher for longer' scenario when the US 10-year bond yields reached 5% mid-month on concerns about bond supply and term premiums. The US dollar stayed resilient while developed countries' central banks' outlooks diverged on the margin, with the BoJ staying dovish at the end of October, the ECB seeing a growth slowdown with easing inflation, and the Fed expected by the market to deliver a hawkish hold overnight. In Asia, the top three performing markets in October were: Malaysia (-0.2%, led by industrials/materials and upside in banks), Taiwan (-1.7%, China smartphone restocking), and Hong Kong (-2.2%, oversold). Indonesia (-8.5%) was hit with a surprise rate hike and weak rupiah. The EV battery material craze in South Korea (-6.6%) faded this month on the weaker outlook for EV sales. China's September macro data continued its positive momentum, but investors trimmed while waiting for clarity on LGFVs and US-China progress. The Chinese government started to address the LGFV risks with financial security a priority, announced an expansion of the fiscal budget, and the Biden-Xi meeting at the November APEC.

Based on transaction prices, the fund's return was -4.43%. The portfolio underperformed its benchmark. South Korea and India worked well in October, but Taiwan, Hong Kong, China and Vietnam were weak. In terms of sectors, stock selection in communication services contributed positively, while consumer discretionary and IT dragged. On the positive side, Indian IT outsourcing company HCL Technologies continued to outperform after positive earnings. Chinese medical equipment company Shandong Weigao made a bottom and saw improving market interest given its very attractive valuation. Chinese internet gaming & media company NetEase sustained operating momentum by leading the TikTok channel. On the other side, Beijing New Building Materials dropped on weaker-than-expected results. FPT Corp in Vietnam saw selling pressure after a strong share price performance earlier.

Market sentiment remains subdued with concerns around a global slowdown, a recession in the US and an uncertain economic recovery in China. Despite the on again off again view of US rates and geopolitics, there have been some small improvements in the region. The green shoots in the Chinese economy seem to be spreading with the piecemeal stimulus gaining some traction, while valuations are still very low. Our focus continues to be earnings, although it will be selective. After the recent pullback amid extremely weak sentiment, it is a great time for global investors to allocate to Asia. Recessionary level valuations, more prudent monetary and fiscal policy along with the benefits of reopening put Asia in a good position. Also, the Asian supply chain is fully participating in the most exciting development in AI, with an attractive valuation, which is just beginning to be recognized. Consumption, economic activity and stimulus will remain the focus in China, with any commentary around stimulus to be closely watched, as was the case in the past months. The fund's portfolio (41 stocks) is good value at 10.8x forward earnings, 5.1x cash flow, 0.8x book, 14% ROE and 3.3% dividend yield.