Robeco Chinese A-share Equities D EUR

The Chinese Equities investment team consists of five investment professionals with an average experience of 10 years, combining complementary skills and worldwide investment backgrounds. The team’s portfolio managers place local insights into the context of a wider regional and global perspective. Local presence in Hong Kong and Shanghai allows for optimal coverage of both off- and onshore markets, respectively. Mr. Lu is the Head of Investments China. He is responsible for Robeco’s overall investments and research activities in China. Before joining Robeco in Nov 2015, Mr. Lu worked as a Portfolio Manager at Norges Bank Investment Management in Shanghai from 2011 to 2015, and as an analyst in Hong Kong from 2009 to 2011. Prior to that, he worked at the M&A department of Morgan Stanley Asia Ltd. Mr. Lu started his career as an engineer at Motorola, Inc. in 2000 and subsequently held several managerial positions. Mr. Lu is a native Mandarin Chinese speaker. He holds an MBA with Distinction in Finance and Marketing from the Kellogg School of Management at Northwestern University in the US. He also holds a Master’s degree in Electrical Engineering and Computer Science from the University of Illinois in the US and a Bachelor's degree in Biochemistry from Fudan University in China.

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.

China's manufacturing PMI unexpectedly dropped to below 50 in April, as the reopening boost on domestic orders faded, coupled with weak external goods demand. However, services PMI remained strong on sustained strength in travel, offline retail services and business services. Construction PMI remained sturdy, given the continued support from infrastructure capex. Overall, April NBS PMIs are consistent with our view that the recovery will be predominantly driven by consumption and services. The Politburo meeting on 28 April offered a cautiously optimistic view on the economic recovery. The bureau reckoned that current economic activities have been "fully normalized" and that the Q1 GDP growth was above expectation. On the other hand, policymakers highlighted that China is still in a recovery phase with weak growth momentum and insufficient demand. Policymakers maintained the same policy stance of an "accurate and forceful" monetary policy and an accommodative fiscal policy. The meeting reiterated "unswerving" support for the private sector, encouraging big tech firms to innovate. The bureau also discussed a continuation of the policy to support housing upgrades and housing completion.

Based on transaction prices, the fund's return was -6.50%. Robeco Chinese A-share Equities underperformed its reference index by -2.3% in April. Negative contributions came from information technology and materials, while positive sector contributions came from communication services and real estate. The main detractors were Thunder Software Technology, Huangzhou First Applied Material and Wuliangye Yibin. The main contributors were China Pacific Insurance, Anhui Heli and 37 Interactive Entertainment.

We are constructive on the Chinese market, as the country's pro-growth policies are supporting its recovery. Recovery is largely on track with the improvement of mobility. Looking ahead, a rebound in economic activity, especially the resumption of services, will support employment and household income, both of which could further drive consumption recovery. Recovery of the property sector remains a key area to monitor, as it will impact the sustainability of consumption recovery, which is expected to be a main driver of this year's growth. On the geopolitical side, long-term US-China tension is unlikely to subside, and escalation could still happen in the near term. On the positive side, earnings revisions are stabilizing and set to recover, helped by the turnaround in domestic fundamentals such as mobility and economic activities improving, as well as a lower base in 2022. Valuations remain attractive from a historical average point of view. In the long run, we focus on the structural growth drivers of the Chinese economy, while selectively investing in structural winners within themes such as consumption upgrades, the green economy, technology innovation, and industrial upgrades.