Robeco Asian Stars Equities D USD

Vicki Chi is Portfolio Manager in the Asia Pacific team with a focus on the Philippines. 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. 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.

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 roaring start of the year, Asian markets dropped back (-6.8%) in February more than global equities (-3%), shifting from China's reopening optimism to focus on a longer tightening interest rate cycle with higher peak rates 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 notably outperformed (CSI300 -4.7%). China saw the re-surfacing of geopolitical risks with the US on the 'spy balloon' incident, as well as regulatory risks. Most Chinese earnings previews for 2022 were weaker than expected. Although given that the reopening only happened in November and Covid spread through the country in December, 2022 earnings are in the rear-view mirror. Indonesia (-0.8%) outperformed on a better-than-expected trade surplus and flat deadline inflation in January. Taiwan (-1.4%) led South Korea (-6.6%) in tech sector gains. In India (-4.7%), further declines in Adani Group stocks were offset by better performance in financials and staples.

Based on transaction prices, the fund's return was -4.71%. The portfolio outperformed its benchmark driven by stock selection. Stock picks in China and Indonesia worked well in February. In a semiconductor rebound favoring Taiwan, our stock selection in Taiwan and South Korea detracted this month. On the positive side, Indian financials rebounded from weak sentiment last month, benefiting our holding ICICI Bank. China Resources Pharmaceutical outperformed in China as a defensive exposure with an improving earnings trend. Bank Mandiri in Indonesia outperformed on improving sentiment in the country. Chinese recycling gypsum board maker Beijing New Building Material rallied on further supportive policies for the property sector. On the other side, Alibaba and Ping An dropped back after a very strong rebound in January. Regulatory risks rose in South Korea as President Yoon Suk-yeol attempted to improve his popularity. Our holdings KB Financial and KT Corp dropped on less hope for shareholder returns in the short term. A further retreat of oil prices in February led to a weaker performance of China Oilfield Services.

Asian markets came back into favor as China abandoned its zero-Covid policy. After the first rally off the low, it is a great time for global investors to allocate to Asia. 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. A trip to ASEAN recently confirmed that investment and growth continue to be robust, despite some inflationary pressures, especially in Indonesia. Concerns over growth are likely to remain in cyclical sectors such as tech hardware, but asset-based valuations are getting closer to a trough and this should provide a floor. The recent market rout surrounding Adani Group companies highlights the importance of incorporating corporate governance analysis into valuations of emerging market companies. India is a good long-term story, but we remain selective and disciplined with our value approach.