Robeco Next Digital Billion F EUR

Michiel van Voorst is Portfolio Manager and member of the Thematic Investing team. He has a focus on financials/fintech/next digital billion. In 2020, 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 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 Emerging Markets Index (Net Return, EUR).

In August, the MSCI Emerging Markets Index returned -0.7% in EUR (+1.6% in USD), while the Robeco Next Digital Billion Fund outperformed with +1.9% in EUR (+4.2% in USD). MercadoLibre (+24%) in Brazil exemplified the power of ecosystems, seamlessly integrating e-commerce, fintech, and logistics. Similarly, Sea Group (+19%) in Southeast Asia integrated e-commerce, digital payments, and entertainment, showing strong results and raising guidance for Shopee. In India, Zomato (+9%) continued to expand its platform beyond food delivery. China remained volatile, but GDS (+56%) led gains with strong data center growth, while Meituan (+8%) and Ke Holdings (+7%) also performed well. However, PDD dropped 30% due to weak results, and Venustech (-13%) and ATRenew (-12%) suffered from economic headwinds. Latin American companies like Nu Holdings (+23%) and Asian companies such as Indonesia's Sea Group and Vietnam's FPT (+6%) also contributed positively. Additionally, gains were seen in Egypt's Fawry (+10%) and Africa's Airtel Africa (+4%).

Based on transaction prices, the fund's return was 1.50%. In August, the Robeco Next Digital Billion Fund saw varied performance across its six key trends. Internet Platforms like MercadoLibre (+24%) and Sea Ltd (+19%) contributed well, due to strong quarterly results, while Baidu fell 5%. In Fintech, Nu Holdings rebounded 23%, while PagSeguro faced competitive pressures. B2B/Enterprise was mixed, with Globant up 4% but Venustech down 13% due to China's weak economy. Mobility/E-Logistics saw minor losses, with Grab declining 2% despite positive results, while ESR Group gained 2%. ICT & Enablers had a strong month, led by GDS (+56%), while Hynix and Samsung dropped 8% and 4%, respectively. Lastly, Online Consumer & Media showed varied performance, with Meituan (+8%) and Ke Holdings (+7%) rising, but Kanzhun fell 8% due to cautious guidance.

Looking ahead into 2024, we remain positively constructive with investors beginning to look more rationally toward the future. Disinflation is on track, making way for growth-supportive central bank policy. The Fed has paused, the dollar is weakening, and EM Central Banks have pivoted ahead of the US. We remain firmly committed to our key underlying trends. Coupled with the overall characteristics of the portfolio, reflecting increased quality and a strengthened profitability profile, and considering its undemanding valuations, we believe the portfolio is well-positioned to weather whatever the coming months have in store. Meanwhile, we will continue to scout for opportunities where the market might be underestimating a company's future potential.