Robeco Sustainable Asian Stars Equities DL USD

Vicki Chi is Portfolio Manager in the Asia Pacific team with a focus on the Philippines. Prior to joining this team in 2014, she was an Analyst in the Robeco Emerging Markets team where she covered Chinese stocks in the telecom and banking sector. Vicki started her career in 2006 at Robeco. She is a native speaker of Mandarin Chinese and holds a Master’s in Business Administration from Erasmus University Rotterdam. She also is a CFA® charterholder. Joshua Crabb is Lead Portfolio Manager and Head of Asia Pacific Equities. In the emerging markets universe he covers Thailand and Vietnam. Before joining Robeco in 2018, Joshua was Head of Asian Equities at Old Mutual and Portfolio Manager at BlackRock and Prudential in Hong Kong. He started his career in the investment industry as Sector Analyst at BT Financial Group in 1996. Joshua holds a Bachelor's with Honors in Finance from the University of Western Australia and he 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 via exclusions, ESG integration, ESG and environmental footprint targets, 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 fundamental investment analysis to assess existing and potential (long-term) ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

In April, Asian markets lost 2.1% after the rebound in March. South Asia delivered the best performance: Indonesia (+6.5%) and India (+4.2%) enjoyed low valuations, a peaking inflation and rate cycle as well as good earnings reports. Renewed concerns over US-China tensions and fear of a slower-than-expected economic recovery led to sell-downs of Chinese internet stocks and made China (-5.2%) the worst-performing market. Taiwan declined (-4.1%) due to profit-taking in semiconductor stocks. In South Korea (-0.8%), investors switched out of battery material into auto and memory stocks. Energy was again the top-performing sector, driven by better-than-expected earnings from big energy companies and a surprise output cut by OPEC+ in early April. On the ESG front, the Hong Kong stock exchange plans to make it mandatory for HK-listed companies to make climate-related disclosures, which is an upgrade from the current 'comply or explain' regime. EVs dominated the Shanghai Auto Show in April and will likely make up a third of China's auto sales in 2023. This compares to 2% in Japan, 6% in the US and 15% in Europe in 2022.

Based on transaction prices, the fund's return was 1.19%. In April, Robeco Sustainable Asian Stars outperformed the index, driven by stock selection. China, Indonesia and South Korea all contributed positively, while our underweight in India detracted. In terms of sectors, financials, IT and materials drove the outperformance, and our underweight in industrials and energy detracted. On the positive side, LG Chem reported strong results. On the back of that, our holding in LG Chem Pref also saw a narrowing of the discount to common shares. Huatai Securities reported good results and the market appreciated its growth in asset management. ICICI Bank recovered in line with the Indian market. Shandong Weigao was considered a defensive stock in a month in which the Chinese market was weak. Meanwhile, Alibaba dropped in line with the weak sentiment on Chinese internet stocks. Not owning AIA detracted, as the stock bounced back from earlier sell-offs. Not owning Reliance Industries detracted, as it reported good results, benefiting from the lower cost of Russian oil. Sino-American Silicon reported stronger-than-expected results and a positive outlook on its solar business, but a cautious view on the semiconductor wafer market dragged the stock down.

Excitement returned to Asian markets last month on China's reopening, but disappointment around earnings and guidance saw that market retrace. Combined with concerns around SVB and banking contagion, this added to a risk-off mood. Although with global growth slowing there will be mounting earnings risks, the sounder fiscal and monetary policy that has been adopted in Asia should make markets more resilient than in the past. Concerns over growth are likely to remain in cyclical sectors such as tech hardware, but asset-based valuations are getting closer to a trough and this should provide a floor. Asian markets still offer good value for investors, despite the large move in equity markets. Volatility could increase as the market navigates through this earnings season. Asian markets are still 30% cheaper than global markets. Now that earnings revisions show signs of bottoming out, it is timely to allocate to Asia for global investors. We focus on bottom-up stock picking and on companies with a good sustainability profile, solid cash flow generation, trading at a good price and having positive momentum.