Robeco Emerging Stars Equities F USD

Jaap van der Hart is the Lead Portfolio Manager of Robeco’s High Conviction Emerging Stars strategy. Over time, he has been responsible for the investments in South America, Eastern Europe, South Africa, Mexico, China and Taiwan. He also coordinates the country allocation process. He started his career in the investment industry in 1994 at Robeco's Quantitative Research department and moved to the Emerging Markets Equity team in 2000. Jaap holds a Master's in Econometrics from Erasmus University Rotterdam. He has published several academic articles on stock selection in emerging markets. Karnail Sangha is a Portfolio Manager within the Emerging Markets Equity team and provides analytical research coverage on India. He is Co-Portfolio Manager for the Emerging Stars and Sustainable Emerging Stars Equity strategies. Prior to joining Robeco in 2000, Karnail was a Risk Manager/Controller at Aegon Asset Management where he started his career in the industry in 1999. He holds a Master's in Economics from Erasmus University Rotterdam and is a CFA® charterholder. Karnail is also fluent in Hindi and Punjabi.

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.

In February, emerging markets declined by 4.2% in euro terms, performing worse than developed markets, which were down 0.1%. One important driver was the increase in US bond yields, as the outlook for the potential Fed interest rate cuts became less optimistic. Also, geopolitical risks between China and the US came to the foreground again, among others due to the Chinese balloon flying over the US. China was therefore one of the worst-performing countries in February, together with Thailand, Colombia, Brazil, South Africa and Saudi Arabia. The best-performing countries were the Czech Republic, Greece and Turkey. Turkey experienced a very severe earthquake, but the market was higher as the government instructed banks and state pension funds to support the equity market.

Based on transaction prices, the fund's return was -5.33%. In February, the fund outperformed the MSCI Emerging Markets Index due to both country allocation and stock selection. The largest positive contributions came from the underweight position in China and a positive stock selection result in Brazil, India, South Korea and Taiwan. Taiwanese server company Wiwynn made the largest positive contribution, as the stock benefited from positive sentiment on AI and potential demand growth for AI servers. Other portfolio holdings that performed relatively well included Brazilian financial Itaú Unibanco, Greek financial Alpha Services, South Korean car company Kia and Mexican financial Banorte. The largest negative contributors in February were the positions in Chinese internet company Alibaba, South Korean Hana Financial and Vietnamese property developer Vinhomes.

The global environment is still challenging for equity markets, with high inflation across the world, growth slowing down and the main central banks raising interest rates to fight inflation. On the margin, however, the outlook is improving, as inflation is likely to peak and already declining in some countries, and global central banks may slow the hiking process. Emerging markets were early in hiking interest rates this cycle, so they are now also closer to the peak. Finally, the economic outlook in China is improving, as it has ended the strict Covid measures and has announced more economic policy support. After this year's correction, market valuations have become more attractive, and in particular for emerging markets they are now at longer-term averages. In addition, emerging markets are attractively valued relative to developed markets with discounts of more than 30% based on earnings multiples.