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 April, emerging markets declined by 2.7% in euro terms, lagging the 0.1% return for developed markets. The best emerging countries were the Central European countries (Hungary, Poland and the Czech Republic), Indonesia and the UAE, while China, Turkey and Taiwan were the worst performing ones. China's economic recovery after the end of the Covid measures is happening, with Q1 GDP growth at 4.5%, and improving retail sales and export numbers. Yet the market was still down on some geopolitical concerns and high expectations at the start of the year. Turkey will have elections in May, which will be a close race between President Erdogan and opposition leader Kilicdaroglu. Inflation is gradually coming down across emerging markets, and interest rates have largely been kept stable in April.

Based on transaction prices, the fund's return was -0.07%. In April, the fund outperformed the MSCI Emerging Markets Index, with both country allocation and stock selection contributing positively. Key positive contributors were the underweight position in China, the overweight position in Hungary and positive stock selection results in China and South Korea. Within China, the positions in insurance company PICC P&C and gas distribution company Kunlun contributed positively. Chinese internet companies were down significantly. As a consequence, not having a position in Tencent, JD.com and Meituan contributed positively, but this was counterbalanced by the portfolio position in Alibaba. Within South Korea, the preferred shares of Hyundai Motor and LG Chem performed strongly, significantly exceeding the return for ordinary shares. The largest negative contributions in April came from the underweight position in India, no position in Saudi Arabia and stock selection in South Africa and Brazil. In South Africa, Naspers lagged the market, in line with the performance for its key holding in Tencent. In Brazil, retailer Sendas underperformed due to the higher interest rate and capex costs.

The global environment is still challenging for equity markets, as inflation remains relatively high and global central banks have continued to raise interest rates. This has led to financial stress for some European and US banks, and global growth is likely to slow down. Emerging markets, however, seem relatively well positioned, as inflation is actually lower in many countries, they were earlier in hiking interest rates in this cycle and growth in China is picking up after the end of the zero-Covid policy. After last year's correction, market valuations have become more attractive. Emerging markets in particular are attractively valued relative to developed markets, with discounts of around 30% based on earnings multiples.