RobecoSAM Global SDG Engagement Equities I USD

Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is also Co-Head of Robeco’s Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in the information technology, real estate & communication services sectors, as well as portfolio construction. He has been in this role since 2009. Previously, he was responsible for managing the Robeco IT Equities fund within the TMT team. Prior to joining Robeco in 1999, he worked as a Portfolio Manager Japanese Equities at Achmea Global Investors (PVF Pensioenen). From 1995 to 1996 he was Portfolio Manager European Equities at KPN Pension Fund. He holds a Master's in Econometrics from Vrije Universiteit Amsterdam and he is a CFA® Charterholder. Daniela da Costa is responsible for the team’s investments in Brazil and the African consumer sector. Prior to joining Robeco in 2010, she was Portfolio Manager Latin American Equities at Nomura in London. Before that, Daniela worked at HSBC and with the Petrobras pension fund in Brazil. She started her career in the industry in 1997. Daniela holds a Master's in Economics from the Brazilian Capital Markets Institute in Rio de Janeiro (IBMEC-RJ) and a MBA certificate in pension fund asset management from the Federal University of Rio de Janeiro (COPPE-UFRJ). She is board member of AMEC, the Brazilian stewardship agency and a member of Robeco’s SDG committee and Biodiversity Task Force. Peter van der Werf is Head of Engagement at Robeco. He leads the corporate and sovereign engagement program in the Active Ownership team and is involved in further integration of active ownership in Robeco’s investment products. With his engagement work he has challenged sustainability leadership at more than 200 global companies to align their environmental and social strategy with Robeco’s sustainable investing philosophy. As Portfolio Manager SDG Engagement Equities, Peter contributes to impact investing in listed equity. He is also an Advisory Board member of the Finance for Biodiversity foundation. Peter started his career in 2007 and holds a Master’s in Environmental Sciences from Wageningen University.

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 0.01% 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.

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual 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 by the means of a target universe, exclusions, ESG integration and engagement. The fund solely invests in stocks issued by companies with a low negative to low positive impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). The fund actively engages with 100% of the corporate holdings typically for a period of three to five years. The fund does not invest in stock 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 ESG risks and opportunities. 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 that are relevant 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 [Index name].

A rapid shift from high-five mood to wall of worry and cautious comeback essentially sums up global equity markets in August, ending the month in slightly negative territory (-1% in EUR, -2% in USD). As higher US rates and a worsening data flow from both Europe and China challenged the prevailing Goldilocks scenario, defensive sectors and quality performed well. The crowded tech space, in particular, was hurt in the first half of the month as US real yields kept pushing higher. Erratic trading was exacerbated by thin summer liquidity, though markets calmed down at the end of the month as softer US data eased the rates market. Also, China stepping up its stimulus measures helped sentiment and the broader equity market managing losses, ultimately. Big picture, a key driver behind market strength thus far this year is that earnings have held up much better than expected. We are still cautious that this can be sustained, and we think that data signals around unemployment, inflation and PMIs, for example, are not supportive to stage a genuine broadening out of the market.

Based on transaction prices, the fund's return was -3.02%. The portfolio had a neutral performance in August, underperforming the benchmark by 15 basis points relative to the MSCI World ACWI that serves as its benchmark. Year-to-date, the portfolio still shows a healthy outperformance relative to the benchmark of 135 basis points. The portfolio benefited from strong stock picking results in materials and real estate, and good contributions from individual stocks like Amgen and Adobe Software. Stock picking in information technology and consumer discretionary lagged during the month, as both STMicroelectronics and Sony Corp gave up some of their year-to-date gains. We only made some small changes to the portfolio during August, rebalancing some of the weight from the information technology names back into laggards in healthcare, after quite dramatic moves so far this year.

August trading has been indicative for how the year has progressed so far: a search for new narratives to offset a looming recession. Initially, a China rebound was supposed to be the engine of hope, then Artificial Intelligence, followed by the ‘soft landing’ narrative. Interestingly, where hopes for the latter initially acted as a driver for higher returns, the flip side of it are revived fears that rates would have to go higher than the market actually hopes, stymieing further upside. In that scenario, expensive and long duration parts of the market will suffer, just like in 2022, and early August seemed to be a good reminder of that. A case in point was that NVIDIA was not able to fuel sentiment higher, despite another giant earnings beat. In fact, ironically, it was not until we saw some slightly softer data around US consumer sentiment and the labor market being seen as a relief to the market as it reinstated the ‘peak rate’ narrative. All in all, we can debate the macro backdrop extensively, in the end it is about stock picking, where we obviously feel most comfortable with our quality-focused portfolio to navigate different scenarios.