Robeco Asia-Pacific Equities D USD

Joshua Crabb is Lead Portfolio Manager and Head of Asia Pacific Equities. In the emerging markets universe he covers Thailand and Vietnam. 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. Harfun Ven is Portfolio Manager in the Asia Pacific team with a focus on cyclical sectors. Prior to joining Robeco in 2008, he was Portfolio Manager Japanese Equities at Alliance Trust. Harfun also managed Premier Alliance Trust Japan Equity, a top quartile ranked fund. Before that, he spent six years with Bowen Capital Management, managing both Japan-only and Asia-Pacific funds. He started his career in the investment industry in 1998. Having grown up in Japan, he fluently speaks Japanese, Cantonese and English. Harfun holds an MBA from Boston University and a Bachelor's from the University of Massachusetts.

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.

After a strong January, Asian markets dropped back (-5.8%) in February, underperforming global equities (-3%). China's reopening optimism faded and the focus turned to the 'higher for longer' interest rate cycle in the US. The 2-year US Treasury yield reached 4.83%, the highest level since 2007, pulling risk assets lower. China and Hong Kong were the worst-performing markets (-10.4% and -7.1% respectively), but A-shares were more resilient (CSI300 -4.7%). Geopolitical concerns re-surfaced with the 'spy balloon' incident, and earnings concerns increased with Chinese and Australian earnings previews weaker than expected. With the China pullback and the Adani issues still overhanging India, ASEAN was back in focus, with Indonesia (-0.8%) outperforming with a better-than-expected trade surplus. Taiwan (-1.4%) performed better, while South Korea (-6.6%) and India (-4.7%) lagged.

Based on transaction prices, the fund's return was -3.62%. The portfolio outperformed its benchmark over the month. Stock selection in Japan, China, Indonesia and the Philippines worked well in February. A strong performance in Taiwan relative to South Korea in semiconductors detracted, given our valuation driven preference for the latter. Australia also dragged, with one of our holdings reporting an earnings miss. On the positive side, Renesas reported strong results and guidance, driving a re-rating from cheap valuations. SMFG continued to do well, with further suggestions of a move away from yield curve control in Japan. Nissan also benefited from a restructuring with the JV agreement with Renault. China Resources Pharmaceutical saw improving earnings revisions and our underweight in Meituan also aided stock selection in China, with increasing competition in the sector. Bank Mandiri in Indonesia outperformed on improving sentiment in the country. On the other side, Alibaba, KT Corp and KB Financial saw profit-taking after a strong run in recent months. Regulatory risks rose in South Korea as President Yoon Suk-yeol attempted to improve his popularity.

Asian markets came back into favor as China abandoned its zero-Covid policy. After the first rally off the low, the focus will now turn to earnings. Japan's move away from YCC and improving corporate governance leading to restructuring, buybacks and higher dividends, will be supportive for that market. We focus on companies with a solid business model that can deliver stronger earnings recovery into next year. Although with global growth slowing there will be mounting earnings risks, the sounder fiscal and monetary policy that has been adopted in Asia should make markets more resilient than in the past. The recent pullback in ASEAN makes long-term structural growth even more attractive. Concerns over growth are likely to remain in cyclical sectors such as tech hardware, but asset-based valuations are getting closer to a trough in Asia and this should provide a floor. India is a good long-term story, but we remain selective and disciplined with our value approach. However, the sell-off will produce stock-specific opportunities. The portfolio's metrics represent good value despite market moves at 10.4x forward earnings, 5.8x cash flow, 0.96x book, 11.3% ROE and 3.5% dividend yield.