RobecoSAM Global Gender Equality Equities I EUR

Audrey Kaplan is Lead Portfolio Manager and member of the Global Equity team. She is responsible for fundamental global equities with a focus on gender-based investing and on companies in financials, consumer staples, and portfolio construction. She joined Robeco in 2021. Previously, she was Head of Global Equity Strategy at Wells Fargo Investment Institute (NY). Prior to joining Wells Fargo, she worked as Head of International Equity Team and Senior Portfolio Manager at Federated Investors, Inc. (NY, now known as Federated Hermes). She also held roles in European research at Merrill Lynch International (London) and in Asian research at Salomon Brothers, Inc. (Tokyo) earlier in her career. She holds a Master's in Finance from London Business School and a Bachelor’s in Computer & Systems Engineering from Rensselaer Polytechnic Institute. Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in information technology, real estate and portfolio construction. He has been in this role since 2009. Previously, he was responsible for managing the Robeco IT Equities fund within the TMT team. Prior to joining Robeco in 1999, he worked as a Portfolio Manager Japan at Achmea Global Investors (PVF Pensioenen). From 1995 to 1996 he was Portfolio Manager European Equities at KPN Pension Fund. He holds a Master's in Econometrics from Vrije Universiteit Amsterdam 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 0.01% 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.

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual 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 by the means of a target universe definition, exclusions, negative screening, ESG integration, and voting. The fund invests at least two-thirds in companies that have a Gender Equality score of 50 or higher and only invests in companies with positive or neutral SDG scores based on the internally developed SDG Framework. The fund also applies a negative screening to exclude the 20% worst ESG scoring stock issuers from the investable universe and does not invest in stock issuers that are in breach of international norms or where products have been deemed controversial as per Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. 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.

The January risk-on rally provided the global equity markets with a strong +5.2% (in euros), the first positive January since 2019. Globally, high beta stocks led the rally. Cyclical sectors appear to be pricing in a more dovish stance in 2023 and a rebound in PMIs back to solid expansion territory in H1, but several leading economic indicators (e.g. the US yield curve) point to more economic softness. The interplay between sticky inflation versus rates and growth versus recession is still ongoing, with no decisive winner emerging. However, there were several positives in January, including the decline in energy prices, particularly in Europe, where natural gas futures continued their decline from late 2022, reaching their lowest point since September 2021. Another positive for the global economy has been the continued reopening of China's economy. On the margin we reshuffled our portfolio for modest profit-taking in defensives that did well in 2022 to pick up more attractive high-quality European hardware and telecommunications companies.

Based on transaction prices, the fund's return was 4.14%. In January, the portfolio underperformed the MSCI World Index by 100 bps, mainly driven by poor stock selection within healthcare and consumer discretionary. CVS' share price continues to be overshadowed by the Medicare Advantage (MA) Stars downgrade. We remain constructive on the stock, as the company continues to expand its services and to increase its share of wallet by bringing new customers to CVS Health, something that should further support its strong cash flow generation capability. UnitedHealth performed poorly despite posting strong Q4 numbers and reiterating its 2023 guidance, a potential indication of the ongoing market rotation (from more defensive names towards more cyclical ones). Among the strongest contributors were all three semiconductor companies – STMicroelectronics and ON Semiconductor, which posted positive outlooks, driven by healthy auto and industrial semiconductor ASPs and order backlog demand. Another strong contributor was KB Financial, whose shares rallied strongly over the month after a South Korea-based activist fund became involved in Korean banks, trying to push them to increase their historically very low payout ratios.

We are awaiting more confirmation of lower inflation indeed materializing. Most central banks might be in for a slowdown of rate hikes in 2023. Nonetheless, the new neutral rate level – wherever that may end up – remains firmly higher than what we have seen in many years. We believe that the market is too optimistic and will continue to underestimate the stickiness of inflation, which is still at very elevated levels. With market valuations not anywhere close to trough levels to reflect these uncertainties, risk is still to the downside. Too many pockets in the market simply have not seen real multiple compression, with negative earnings revisions looming as we enter 2023. As we have communicated before, caution is still warranted, given the current macro conditions. To navigate this environment, portfolio robustness is needed. Focusing on a diverse mix of high-quality companies with strong operational track records and resilient business models is, therefore, something we continue to do with our investment strategy.