RobecoSAM Global SDG Equities D USD

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. Christoph Wolfensberger is a portfolio manager at Robeco within the Global Equity team with over 10 years of experience in Sustainability Investing. He is also the deputy portfolio manager for the Global SDG Equities strategy.  Prior, Christoph was also a Quantitative Analyst covering Sustainability/Impact Investing within Robeco’s Products & Engineering Team with a strong focus on customized solutions as well as portfolio optimizations. Prior to joining in 2011, he served as an Intern on the ESG Research team for six months. He holds a Master’s of Science Degree in Chemistry and Business Studies from the University of Zurich.

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’s sustainable investment objective is to advance the United Nations Sustainable Development Goals (SDGs). SDG and sustainability considerations are incorporated in the investment process by the means of a target universe, exclusions and ESG integration. The fund solely invests in stocks issued by companies with a medium or high positive impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). Furthermore, the fund does not invest in stock 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 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.

In February, the MSCI World Index was only slightly down (0.3% in EUR), with information technology, industrials and consumer staples being the top-performing sectors, while energy and real estate were the laggards. On the macroeconomics front, a very strong January US non-farm payrolls report was followed by stronger-than-expected inflation figures. US January CPI inflation came in higher than expected and the Fed's preferred inflation measure – core PCE, which strips out volatile food and energy costs – was also well above expectations, at 4.7%. Since the publication of the January payrolls report, US 2-year breakevens have jumped strongly and are currently comfortably above 3%, indicating that market participants still think that the Fed remains too far from accomplishing its 2% inflation target. The situation in Europe is not much different, with February inflation rates in France and Spain coming in substantially higher than consensus, indicating that European inflation, similar to the US, may prove more persistent than what was hoped for.

Based on transaction prices, the fund's return was -1.85%. The fund outperformed the MSCI World over the last month, which was mainly driven by positive stock selection within industrials, communication services and materials. Sector allocation was also supportive, but was offset to a large extent by a negative currency effect. Among the strongest contributors was again ON Semiconductor, whose shares saw a new all-time high during the month. Another large contributor was Linde PLC, which continues to positively surprise the market with a strong order book and hydrogen projects materializing. Among the largest detractors was KB Financials after its strong rally at the beginning of the year. The company posted muted results, with some concerns related to its Indonesia business, where loan loss provisions were increased. Another large detractor was Columbia Sportswear, which posted solid Q4 numbers. After its very strong performance in January, we suspect that remaining high inventory levels and potential margin pressure from unwinding this, as well as profit-taking, were the reasons for the recent weakness.

After a very strong start to the year, financial markets are having to digest the implications of sticky high inflation levels and record low unemployment rates. The market's focus on the Fed's and other CBs' next moves remains as sharp as it might get, but we believe this is too simplistic, as there are many more, relevant moving pieces than 'just' policy rates. Based on history, we still believe that the market is too optimistic and continues to underestimate the stickiness of inflation at the current very elevated levels. With market valuations remaining above depressed levels and the balance of risks for global equity markets overall still looking skewed to the downside, it is hard to get overly excited and hence we maintain our defensive positioning. In the meantime, we continue to look for companies whose risk-return profile turned attractive due to overreactions in the market and we remain confident in our bottom-up approach that focuses on picking companies with strong over-the-cycle fundamentals and resilient business models to identify high-quality stocks at attractive valuations.