Robeco New World Financials D USD

Patrick Lemmens is Lead Portfolio Manager within the Trends Equities team. He has a focus on financials/fintech. Prior to joining Robeco in 2008, he managed the ABN AMRO Financials fund from October 2003 to December 2007. Previously, he held the position of Analyst of Global Financials at ABN AMRO and was Global Sector Coordinator of the Financial Institutions Equities Group at ABN AMRO. Patrick Lemmens started his career in the investment industry in 1993. He holds a Master's in Business Economics from Erasmus University Rotterdam and is a Certified European Financial Analyst. Michiel van Voorst is Co-Portfolio Manager within the Trends Equities team. He has a focus on financials/fintech/next digital billion. In 2019, Michiel rejoined Robeco from Union Bancaire Privée in Hong Kong where he was CIO Asian Equities. Prior to that, Michiel spent 12 years at Robeco in several senior positions including senior portfolio manager Rolinco Global Growth fund and Robeco Asian Stars. Prior to joining Robeco in 2005, Michiel was Portfolio Manager US Equity at PGGM and Economist with Rabobank Netherlands. Michiel started his career in the investment industry in 1996. Michiel van Voorst holds a Master’s in Economics from University of Utrecht and is a CFA® charterholder. Koos Burema is Co-Portfolio Manager within the Trends Equities team. He has a focus on financials/fintech. Koos was an Analyst with the Emerging Markets team covering Korea and technology in Taiwan and Mainland China. Besides this, he was responsible for the integration of ESG in the investment process. Before joining the team in January 2010, he worked as a Portfolio Manager for different sector teams within Robeco. He started his career in the industry in 2007. Koos holds a Master’s in Business Administration from the University of Groningen and 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.

Equity markets gave back some of January's gains as yield curves across the globe shifted upward 40-50 bps. Persistent inflationary pressures dampened sentiment and the MSCI AC World gave up 2.9% (in USD) during the month, with the MSCI Europe better (-0.6%) and the MSCI Emerging Markets (-6.5%) lagging behind. The MSCI AC Financials was down 2.3%, but continued its outperformance against the broader market. Volatility in equity returns could persist as stubborn inflation, a resilient labor market and strong consumer spending prompt central banks to continue tightening, which, in turn, could weigh on corporate earnings. Consensus now has the Fed pause at 5.5% or higher, as implied market expectations have flipped from behind to ahead of the Fed. There is, however, a growing disconnect between the micro and macro level. While there was wide dispersion in the 22Q4 results, companies are not broadly reflecting an accelerating US inflation/tightening labor market narrative. Quite the contrary.

Based on transaction prices, the fund's return was -2.04%. Robeco New World Financials outperformed the benchmark. The best-performing trend was Aging Finance, followed closely by Emerging Finance, while the Digital Finance trend made a small negative contribution to performance. The industry groups Banks (BBVA, Standard Chartered, Nordea Bank) and Diversified Financials (Voya Financial, Jackson Financial) made a positive contribution to performance, while the Insurance (Ping An Insurance, Prudential) and Other Industry groups (StoneCo, Tencent, PayPal) contributed negatively. The best contributors to performance in February were BBVA, Standard Chartered, Voya Financial, Nordea Bank, NU Holdings, Jackson Financial, Coinbase Global, Bawag, MercadoLibre and Grupo Financiero Banorte. The biggest detractors were StoneCo, Ping An Insurance, Hana Financial, Tencent and ESR Group.

2023 starts with a looming recession as central banks tighten monetary policy into a global downturn, which could weigh on equity market returns. So far, labor markets and earnings appear surprisingly resilient. The prospects for a sustained equity market rally may improve if central banks can contain inflation without triggering a significant economic downturn and China orchestrates a successful reopening. Both are very possible. From a macro point of view, following global liquidity conditions will be crucial, as it may signal the return of risk appetite. At the moment, liquidity conditions remain very tight. Whether we look at Goldman Sachs' Financial Conditions Index or at YoY changes in US M2 (broad money), which is now negative, the conclusion is that liquidity conditions are very tight, and this typically does not bode well for risk assets, including equities. The key question is if and when these conditions will start to improve, but when they do, we think there are good reasons to be constructive on financials.