Robeco Multi Asset Growth G 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 global manufacturing cycle picked up steam. For the first time in six months, the JP Morgan Global Manufacturing indicator moved back towards 50, an indication that manufacturing activity is recovering. The Asia-Pacific region is leading the pack, showing the largest positive macro surprises. The combination of stronger macro data and falling inflation was a goldilocks environment for risky assets. There are questions surfacing about how long this will last, given that inflation data has been persistently 'sticky' and has not fallen as quickly as investors had anticipated. US rate cuts for 2023 have been almost fully priced out. It is also becoming clear that the ECB will need to do more. In short, the peak of the rates cycle has been pushed out. Few asset classes delivered a positive return this month. With a loss of -0.1% in EUR, global equities was one of the best-performing asset classes. Both commodities and emerging market equities lost more than 4%. Global investment grade corporates lost 2.7% and lagged behind government bonds and global high yield.

Based on transaction prices, the fund's return was -0.98%. The Robeco Multi Asset Growth Fund was down 0.9% over the month, in line with the benchmark. Resilient economic data and persistently sticky inflation have combined to move expectations for the peak of the rate cycle higher and further out. Global equities ran out of steam somewhat after the strong advances in January. Government bond yields were higher, with both high yield and investment grade spreads widening over the month. The stand out contributor was Sustainable Global Stars. This concentrated equity growth strategy benefited from strong stock selection. For instance, STMicroelectronics benefited from strong semiconductor demand from automotive and industrial customers after chip shortages hit the auto sector hard last year. A tactical overweight in emerging market equities hurt performance from an allocation perspective, as investors are waiting for hard data to confirm how China's reopening will proceed. However, this was offset by strong fund selection in the quant and fundamental emerging market equity strategies. Within credit, a marginal overweight in duration detracted.

Central banks consistently drilled home the message that the hiking cycle is not over, but only recently the market was willing to listen. As always, the market pendulum swung from too dovish to too hawkish. We used the backup in rates to increase our exposure to US Treasuries. We think that German yields are becoming attractive, but are reluctant to add now, as we think they can rise a bit further as inflation seems to be a bit stickier in the Eurozone. The case for emerging market equities remains valid, given their better growth prospects and valuation, and we see the current setback as a temporary pause after a spectacular rally. The headwinds for equities are getting more pronounced and we see few positive catalysts. These concerns have been with us for a while, but only now it looks like the equity markets are starting to lose steam. If this continues, we see it as a signal to start de-risking the portfolio. This de-risking of the portfolio will also have implications for our exposure to high yield, which we would start to lower at that stage.