Robeco Multi Asset Income E EUR

Ernesto Sanichar is Portfolio Manager and member of the Sustainable Multi Asset team. He responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. His asset specialties are fixed income and FX. He has been part of Robeco's Investment Solutions department since 2005. Previously, he was Treasury Manager for four years. Prior to joining Robeco in 2001, Ernesto worked at ING Barings as a Product controller at the cash equities and derivatives desk for three years. Ernesto started his career in the investment industry in 1998. He holds a Master's in Financial Economics from Erasmus University Rotterdam. Mathieu van Roon is Portfolio Manager and member of the Sustainable Multi Asset team and is responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. He joined Robeco in 2011 within the Structured Investments department. Mathieu holds a Master’s in both Business Economics and Econometrics (cum Laude) from Erasmus University Rotterdam and is a Financial Risk Manager (FRM) 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 via exclusions, negative screening, ESG integration, targets on investments in companies and countries based on ESG performance as well as engagement and a minimum allocation to ESG-labeled bonds. For government and government-related bonds, the fund complies with Robeco’s exclusion policy for countries, excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption', and ensures investments have a minimum weighted average score of 6 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. For corporate bonds, the fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile as well as excludes companies with high or medium negative SDG scores following Robeco's internally developed three-step SDG framework. Where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement. 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 25% MSCI All Country World Index (EUR) 75% Bloomberg Global Aggregate (hedged to EUR).

Markets continued to be in risk-off mode, with equities down for the third month. It was a similar story in the bond market, as yield curves steepened sharply over the period. This more cautious mood was echoed by a 7% jump in gold, often considered a safe-haven asset. From a macro perspective, we witnessed positive economic surprises with strong US retail sales and a robust Q3 GDP. It seems that US consumers are happy to keep spending even in the face of persistent inflation and high interest rates. Elevated geopolitical risks also came into focus, following a terrorist attack on Israel by Hamas at the start of October. Israel has responded with air strikes and paved the way for a broader ground invasion in Gaza. Within equities, small and micro caps were the most unloved place over the month, down almost twice as much versus the broader market. Bond markets saw a similar weakness in October. The 2-year Treasury yield saw a slight increase, but the 10-year and 30-year yields rose more than 30 basis points.

Based on transaction prices, the fund's return was -0.80%. The Multi Asset Income Fund was down 0.7% over the month, but a healthy 0.5% above the benchmark. An underweight in equities and a more risk-off stance supported the strong relative performance. The QI Global Conservative Equities segment was the biggest contributor. The strategy endured a tough first half of the year, but has bounced back strongly over the past three months. A low equity beta and an overweight to defensive sectors has shielded the strategy from the recent sell-off in the higher-octane parts of the market. On the fundamental equity side, Sustainable Global Stars had another strong month. Elsewhere, the QI Emerging Conservative Equities segment outperformed its benchmark by 5%. The strategy benefited from an underweight in South Korea, which was hit hard by the sell-off in the semiconductor sector. On the fixed income side, SDG Credit Income slightly underperformed. The strategy has slightly reduced its beta, but retains an overweight in Europe and financials on valuation grounds. The exposure to high yield was the main detractor.

When we stitch together the impact from events over the past weeks, we think there is room for a short-term bounce in equities. We believe there is sufficient catalyst to arrest the negative sentiment momentum that we have witnessed since the summer. Several central banks have indicated that rates have reached sufficiently high levels. So far, the earnings season is decent, with slight earnings beats and top line slightly lagging. Also, if the Middle East conflict does not broaden out, this now seems fairly priced by the market. We do, however, maintain our regional tilt towards emerging markets within equities. Within bonds, we still prefer UK bonds, due to the weak economic outlook, and short Japanese bonds, as we expect the BoJ will need to adjust monetary policy. We must admit we were caught off guard by the recent rapid move lower in yields. If things stand as they are, we will be using spikes in yields to previous highs as an opportunity to increase our exposure to government bonds. We feel comfortable maintaining our current exposure in investment grade debt.