Robeco Digital Innovations D USD

Marco van Lent is Lead Portfolio Manager Robeco MegaTrends/Rolinco, Portfolio Manager Robeco Digital Innovations and member of the Robeco Trends Equities team. Before 2013, he managed Robeco Infrastructure Equities. Marco joined Robeco in October 2007 to co-manage two European equity funds. He worked at Van Lanschot Asset Management to manage the Van Lanschot European Equity Fund. After the acquisition of Kempen Capital Management by Van Lanschot, he worked at Kempen Capital Management for six months to manage European equity mandates. He was Portfolio Manager European equities at Philips Investment Management in the period 1999-2005 and in the period 1996-1999 he was Portfolio Manager at Van Spaendonck Asset Management. He started his investment career in 1985 as a sell-side analyst/strategist. Marco holds a Master's in Business Economics and Finance from Tilburg University. Steef Bergakker is Portfolio Manager Robeco MegaTrends/Rolinco, Portfolio Manager Robeco Digital Innovations and member of the Robeco Trends Equities team. Previously, he was trends researcher within the Trends Equities team and has authored several white papers. Before that, Steef was portfolio manager of Robeco Infrastructure Equities and Robeco Hollands Bezit. Prior to rejoining Robeco in 2008, Steef held different functions at IRIS (Institute for Research and Investment Services), the former research joint venture of Robeco and Rabobank. From 1998 through 2008 he served as head of IRIS Equity Research, and before that he worked as equity analyst for eight years. Steef started his career in the investment industry at Robeco in 1990 as an analyst. He holds a Master’s in Monetary Economics and Finance and Investments from Erasmus University Rotterdam.

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.

Once again, the earnings season is upon us. Investors cautiously welcomed mostly positive earnings reports, especially from the big technology firms, which suggest that companies are still doing well in the face of persistent inflation, higher interest rates and growing recession fears. Equity markets grinded higher in local currencies last month, with large caps doing most of the heavy lifting. However, macroeconomic uncertainties remain high in the face of central banks' dogged pursuit of monetary tightening, while inflation has already peaked. The risk of a policy error forcing a recession is very real. Undoubtedly, this will have further economic consequences as commercial lending is reigned in over the coming quarters. Last month, semiconductor and cybersecurity companies were among the victims of resurfacing worries about weakening near-term fundamentals. We recognize the risks of near-term weakness in results, but are still convinced of the long-term opportunity in these stocks and are therefore reluctant to trade them based on short-term considerations, which may very well already be adequately discounted by the market.

Based on transaction prices, the fund's return was -2.94%. All three trends ended up in negative territory in April. While our biggest trend, Digital Enablers, held up relatively best with a decline of 2.5%, Robotics & Automation suffered the largest setback, giving up 6.0%. Secure Digital Infrastructure also ended up in negative territory. The trend returned -5.0%, as cybersecurity stocks took a step back due to worries that sector peer Tenable's disappointing first quarter might be a forerunner of things to come in the rest of the cybersecurity domain. The top three stocks for April, measured by contribution to return, were Intuitive Surgical (better-than-expected results), SAP (increased confidence in the company's successful cloud transition) and Microsoft (stronger-than-expected first quarter). The bottom three stocks were CyberArk (caught up in cybersecurity jitters after Tenable cut its outlook; no company-specific news), Infineon (concerns on semiconductor pricing later in the year) and Microchip Technology (idem).

The business world is constantly looking for improvements in productivity, efficiency and flexibility. The combination and confluence of increasing connectivity, digitization of products and services, and digitalization of business processes is providing abundant opportunities to make tremendous progress in these respects across virtually every industry. It is this digital transformation of business enterprise that Robeco Digital Innovations is designed to capture. We continue to believe that the secular trends outlined above remain valid and, if anything, have been reinforced by the Covid pandemic. In addition to seeking productivity and efficiency gains, minimizing exposure to human vulnerabilities, such as a pandemic, has come to the forefront as a forceful argument to expedite the digital transformation of business. The long-run prospects are very bright, but the short-run outlook has turned uncertain, as a hawkish monetary policy to counter inflationary pressures may curtail economic growth or even cause a recession. We therefore proceed with caution in the near term, while remaining optimistic for the longer term.