Robeco Sustainable Asian Stars Equities S USD

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.

Into the summer, Asian markets rose 6.13% in July, outperforming global markets (+3.6%) by a large margin. All Asian countries posted positive returns in July. The best markets were China (+10.9%), Malaysia (+9.7%) and Singapore (+9.2%). Dovish central bank hikes (Fed, ECB and BoJ) and lower inflation numbers in the US and UK in June helped ease rate hike fears. China's increasingly vocal support for economic growth, its property market and domestic capital markets towards the end of July lifted hopes for growth stabilization and revived commodity prices, which in turn helped parts of EM Asia. Materials and technology stocks drove returns for Malaysia in July, helped by USD 250 mln of foreign inflows. Communications and banks led Singapore's market higher in July, while electronics exports rose 14% YoY, bringing optimism for more export strength. Taiwan (+0.9%) and South Korea (+6.3) both saw sharp increases in retail participation in AI/server and battery materials stocks respectively, which fizzled somewhat by month-end.

Based on transaction prices, the fund's return was 6.51%. In July, Robeco Sustainable Asian Stars delivered a positive absolute performance and outperformed the index. Strong stock selection in Taiwan and South Korea was the main driver, while China and Indonesia detracted. In terms of sectors, IT and financials drove the outperformance, while consumer discretionary and communication services detracted. On the positive side, Taiwanese power hardware maker Lite-On Technologies continued to rally on an improving demand outlook for both AI server and EV charging power supply. Alibaba rebounded going into the results season with good numbers from recent online sales events and value-unlocking corporate restructuring. Huatai Securities in China rallied as the government vowed to support domestic capital markets. On the other side, HCL Technologies reported a weak set of Q1 results, but retained its earlier full-year guidance. Telkom Indonesia was weak heading into the results, but its valuation is very attractive against low expectations. Not owning Korean steel giant POSCO this month detracted, as the stock became a new retail favorite thanks to its battery materials exposure.

Market sentiment remains subdued with concerns around a global slowdown, a recession in the US and an uncertain economic recovery in China. Rate hike fears around data releases and 'Fed speak' along with geopolitics are unlikely to go away soon, so volatility is likely to stay elevated. Our focus continues to be on earnings and although it will be selective, we believe the sustainability thematic will bring bottom-up stock opportunities as valuation drops. After the recent pullback, 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.