Robeco Multi Asset Income G EUR

Ernesto Sanichar is Portfolio Manager and member of the Sustainable Multi Asset team. He responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. His asset specialties are fixed income and FX. He has been part of Robeco's Investment Solutions department since 2005. Previously, he was Treasury Manager for four years. Prior to joining Robeco in 2001, Ernesto worked at ING Barings as a Product controller at the cash equities and derivatives desk for three years. Ernesto started his career in the investment industry in 1998. He holds a Master's in Financial Economics from Erasmus University Rotterdam. Mathieu van Roon is Portfolio Manager and member of the Sustainable Multi Asset team and is responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. He joined Robeco in 2011 within the Structured Investments department. Mathieu holds a Master’s in both Business Economics and Econometrics (cum Laude) from Erasmus University Rotterdam and is a Financial Risk Manager (FRM) 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, negative screening, ESG integration, targets on investments in companies and countries based on ESG performance as well as engagement and a minimum allocation to ESG-labeled bonds. For government and government-related bonds, the fund complies with Robeco’s exclusion policy for countries, excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption', and ensures investments have a minimum weighted average score of 6 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. For corporate bonds, the fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile as well as excludes companies with high or medium negative SDG scores following Robeco's internally developed three-step SDG framework. Where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.

Sentiment about the global economic trajectory improved in January. Slowing inflationary pressures while real economic activity perked up, eased worries about an imminent recession. In line with expectations, the FOMC hiked its Fed funds rate by 25 bps to 4.50-4.75%. The statement was a little more positive on recent inflation developments. In Europe, central bank guidance remained largely unchanged. The ECB hiked policy rates by 50 bps and kept the door open for further increases. It was the second-best January in 25 years for global equities, continuing the end-of-year feel-good factor for investors. This helped to heal some of the deep cuts in returns seen in 2022. Emerging market equities powered ahead again. With the reopening of China becoming a reality, the bell is ringing 'all clear' on this round of global pandemics. While global equities delivered a more than decent return of 5% (in EUR), they still lagged behind emerging market equities (6%) and global real estate (7.4%) in January. Global investment grade corporate credit and global high yield delivered returns above 3%.

Based on transaction prices, the fund's return was 1.69%. The Robeco Multi Asset Income Fund was up 1.8% over the month, slightly behind the benchmark. After a sharp sell-off in December, equity markets more than recovered the lost ground over January. There was a sharp fall in bond yields, as the US producer price index, which measures final demand prices across hundreds of categories, showed a larger-than-expected decline and further signaled that inflation may be beginning to ease. The knock-on effect was a more challenging relative backdrop for income stocks, which do not stand to gain as much from upward valuations due to changes in interest rate expectations. The RMAI QI Global Conservative Equities segment was a noticeable laggard, but on a longer-term basis the lower beta quant strategy has supported downside protection in the fund. On the fixed income side, the credit income segment outperformed thanks to an overweight in credit risk and duration versus the benchmark. At an individual sector level, a relatively large overweight to bank debt contributed positively to the outperformance of the credit strategy.

The lifting of Covid restrictions in China and the easing fears for an energy crisis in the Eurozone continued to provide a boost to growth. This improved growth outlook in combination with a slide in yields and decent company earnings supported equities this month. The anticipated large drop in earnings has so far not commenced. Earnings are down, but substantial negative earnings surprises are scarce. Our expectation remains that earnings will need to drop further. Because the full impact of the monetary tightening of the past period still needs to be felt and we expect it to have a negative impact on growth and earnings. With valuations still not compelling and earnings revisions still negative, our preference is to be neutral equities. We did adjust our regional exposure within equities. We increased the weight of emerging markets at the expense of the US. The case for emerging markets is one of better valuations and improving growth prospects. The spread of high yield is no longer extremely attractive, but as long as the economic backdrop only deteriorates slowly and a sharp earnings drop does not materialize, the carry on high yield is attractive, so we remain overweight.