Robeco Next Digital Billion F EUR

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.

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.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].

In August, the MSCI Emerging Markets Index declined by -6.2% in USD. The Next Digital Billion Fund underperformed the reference index, primarily due to extreme market reactions and exposure to China and Brazil. Despite overall volatility, some strengths were observed, particularly in the African mobile phone industry, with companies like Shenzhen Transsion and Airtel Africa posting strong results. In China, there was encouraging policy and support for the housing market, though poor market sentiment continued to impact stock prices. Overall, our reference index, the MSCI Emerging Markets Index, decreased by 6.2% in USD (-4.7% in EUR) in August. Robeco Next Digital Billion registered a -7.0% return in August (-5.5% in EUR).

Based on transaction prices, the fund's return was -5.85%. In August, the performance of the portfolio was impacted negatively by internet platforms, with Sea Ltd being the largest detractor, declining by 43%. On a positive note, Kazakhstan fintech Kaspi and Brazilian e-commerce player MercadoLibre rose 13% and 11% respectively in August. The fintech segment contributed negatively due to a profit warning from Linklogis in China. Furthermore, all Brazilian holdings in this trend contributed negatively to performance. This includes PagSeguro, B3, StoneCo, and Nu Bank, which all experienced declines of 21%, 17%, 15%, and 14%, respectively. The B2B/enterprise-focused segment, led by Globant and EPAM, both rose by 17% and 9%, making the most positive contribution. The mobility/e-logistic trend saw a decline, primarily due to ESR Group's 14% drop, while ICT & enabler companies, including Shenzhen Transsion, gained positively, with the latter rising 17%. However, online consumer & media faced headwinds in August, with ATRenew, JD Health, and Kanzhun being the weakest performers in the Chinese market.

Although bearish sentiment lingers in certain markets, we maintain our confidence in the improving operational performance shown by our existing portfolio holdings. This conviction holds true even when confronted with potential volatility in the near future. Meanwhile, we continue to look for pockets of opportunities where the broader market is underestimating what a company's future trajectory looks like.