Robeco Afrika Fonds

Cornelis Vlooswijk is Lead Portfolio Manager and Research Analyst African Equities. Previously, he worked for Robeco as an investment strategist focusing on North America and Emerging Markets since 2005. Before joining Robeco in 2005, he worked for Credit Suisse First Boston as an Investment Banking Analyst, focusing on the transport and logistics sector. He started his career in the financial industry in 1998. Cornelis holds a Master’s in Economics from Erasmus University Rotterdam and is a CFA® charterholder.

The fund is established in the Netherlands. The fund is managed as a 'naamloze vennootschap' (public limited company). The fund has the status of 'fiscal investment institution' in the sense of article 28 of the Dutch Corporate-Income Tax Act 1969, and, as such, is taxed at a corporate-income tax rate of 0%.The fund is obliged to pay out the realized current income in the form of dividend within 8 months after the end of the financial year. From 1 January 2007 the fund withholds Dutch dividend tax at a rate of 15% from these dividend payments. The fund can in principle use the Dutch treaty network to partially recover any withholding tax on its income.

For private investors residing in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Participating units held by private investors who are taxpayers in the Netherlands belong in Box 3. If and insofar as an investor's net assets exceed the net wealth exemption limit, said investor is liable from 1 January to pay 1.2% annually on the balance of his or her net assets. Investors residing in the Netherlands may offset the Dutch dividend tax withheld (15% as at 1 January 2007) against their income-tax payment. Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Dutch tax-exempt bodies may seek a full refund on the 15% dividend tax withheld on dividends (25% prior to 1 January 2007). Interest income is exempt from tax withheld at source. 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 in their tax return. In principle, Dutch bodies that are subject to corporate-income tax may offset the 15% dividend tax withheld on dividends (25% prior to 1 January 2007) against the corporate-income tax and seek a refund of the excess amount. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. Shareholders who do not pay tax in the Netherlands and who are resident in countries that have a tax treaty with the Netherlands to prevent double taxation, may seek a refund for part of the Dutch dividend tax from the Dutch tax authorities, depending on the treaty. As of 1 January 2007, a pension fund having its registered office in another EU member state is also entitled to a dividend-tax refund in the Netherlands. The above is based on the current fiscal legislation and regulation.

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 (long-term) 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 electricity supply problems dominated the news in South Africa in February. On 9 February, President Ramaphosa declared a "state of disaster" to enable the government to support businesses in food production, storage and the retail supply chain with the rollout of generators and solar panels and appoint a minister focusing only on boosting power supply. Those measures help in the medium term, but in the short term the situation deteriorated. Some power plant units broke down and that forced state-owned electricity supplier Eskom to take 7,000 MW of power capacity off the grid on 21 February. By 26 February, some of the broken power plants (representing 3,000 MW) had been fixed and that provided some relief. Economic activity indicators released during the month were mediocre, with retail sales and vehicle sales rising somewhat, but manufacturing and mining output declined. Good news was that inflation came down from 7.2% in December to 6.9% in January. On 22 February, a reasonably solid government budget plan was presented. In Nigeria, ruling party candidate Bola Tinubu won the relatively calm presidential elections, though the opposition contested the results.

Based on transaction prices, the fund's return was -4.12%. In February, the fund's value per share decreased by 1.55% in euro terms, underperforming the reference index, which was down 0.08%. The Emerging Markets Index declined by 4.2%, while the Developed Markets gauge ended the month flat. Nigeria was the best market with a 9.8% gain. Part of this increase happened in the days around the elections held in the country. Egypt was up 8.0%, as investors seemed to like a government plan to attract foreign exchange by selling stakes in state-owned companies in the near future. Senegal followed closely with an increase of 7.9%. Morocco was up 5.5%, while Mauritius' market gained 1.8%. Kenya was up 1.2%. Ghana ended the month 0.4% higher. Botswana was flat. Zambia lost 1.4%, while Tunisia declined by 4.9%. South Africa was the weakest market last month, losing 5.8%, about half of which was due to weakening of the rand versus the euro.

The long-term prospects for the African region are good. Firstly, commodity demand from China and other countries is likely to grow in the long run. This should result in higher tax income and employment, which in turn should boost demand by local consumers. Secondly, the business climate is improving. In an international context, most African countries currently do not score well, but governments are actively trying to reduce bureaucracy. Thirdly, investments in infrastructure are reducing logistics problems, which should boost economic growth and company earnings. Lastly, many companies now trade at low price/earnings multiples and have high dividend yields compared to other regions.