Robeco Sustainable Asian Stars Equities DL EUR

Vicki Chi is Portfolio Manager in the Asia Pacific team with a focus on defensive sectors. 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. 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 via exclusions, ESG integration, ESG and environmental footprint targets, 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 fundamental 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. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on MSCI AC Asia ex Japan Index (Net Return, EUR).

Asian markets dropped 3.9% in October, underperforming the world index, which dropped 3.1%. Investors were concerned about the 'higher for longer' scenario when the US 10-year bond yields reached 5% mid-month on concerns about bond supply and term premiums. The US dollar stayed resilient while developed countries' central banks' outlooks diverged on the margin, with the BoJ staying dovish at the end of October, the ECB seeing a growth slowdown with easing inflation, and the Fed expected by the market to deliver a hawkish hold overnight. On the ESG front, the International Energy Agency warned in its latest report that the equivalent of the entire global electricity grid – 80 mln km of grid – needs to be added or refurbished by 2040 to hit climate targets and ensure reliable power supplies. Global investment in energy grids needs to double to more than USD 600 bln (GBP 492 bln) a year by 2030 to hit national climate targets according to the agency. A new report from Greenpeace highlighted that the largest traditional automakers in China are lagging their global peers on supply chain decarbonization and material efficiency, despite the positive climate change impact of a fast rollout of BEVs in the country.

Based on transaction prices, the fund's return was -4.80%. In October, Robeco Sustainable Asian Stars underperformed the index. Stock selection was good in South Korea and India, but detracted in Taiwan, HK and China. In terms of sectors, communication services outperformed, while financials, consumer discretionary and IT detracted. On the positive side, Indian IT outsourcing company HCL Technologies continued to outperform after positive earnings. Chinese medical equipment company Shandong Weigao made a bottom and saw improving market interest given its very attractive valuation. Chinese internet gaming & media company NetEase sustained operating momentum by leading the TikTok channel. On the other side, Beijing New Building Materials dropped on weaker-than-expected results. Chroma and Lite-On Technology dropped along with other AI stocks. Hyundai Mobis was weak despite strong earnings.

Market sentiment remains subdued with concerns around a global slowdown, a recession in the US and an uncertain economic recovery in China. Despite the on again off again view of US rates and geopolitics, there have been some small improvements in the region. The green shoots in the Chinese economy seem to be spreading with the piecemeal stimulus gaining some traction, while valuations are still very low. Our focus continues to be earnings, although it will be selective. After the recent pullback amid extremely weak sentiment, it is a great time for global investors to allocate to Asian sustainability stocks. The Asian supply chain is fully participating in the most exciting development in AI and EV, with an attractive valuation, which is just beginning to be recognized. Financials in the relatively developed parts of Asia could see peaking interest income and rising asset quality issues, but we still like financial inclusion exposures in South Asia.