RobecoSAM Sustainable Healthy Living Equities F CHF

David Kägi is Portfolio Manager of the RobecoSAM Sustainable Healthy Living Equities strategy. Before joining Robeco in 2019, he worked as a Buy-Side analyst covering the global healthcare sector for Bank J. Safra Sarasin in Zurich, first for Private Banking, then for Asset Management. There, he also managed the Demography Health basket certificate for Bank J. Safra Sarasin. After some years in biomedical research following his PhD, he started his career in the financial industry in 1999 as a Healthcare Analyst at the investment company BT&T, followed by a position as an Investment Analyst for private biotechnology companies with Schweizerhall Management AG in Zurich. David holds a Master in Biochemistry and a PhD in T-cell Immunology both from the ETH 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 promote good health and well-being and contributing to an efficient healthcare system. Healthy living and sustainability considerations are incorporated in the investment process by the means of a target universe definition, exclusions, ESG integration, and voting. The fund only invests in companies that have a significant thematic fit as per Robeco's thematic universe methodology. Through screening on both Robeco's internally developed SDG Framework and Robeco’s exclusion policy, the fund does not invest in issuers that have a negative impact on the SDGs, are in breach of international norms or where products have been deemed controversial. 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.

Overall, the markets started the new year on a rather positive note. In Europe, a mild winter, well-filled natural gas stores and the launch of additional liquid natural gas terminals drove down energy prices, which is a relief for companies and consumers. Even more importantly, China's abrupt reversal of its zero-Covid policy of lockdowns and subsequent reopening has progressed with fewer problems than expected by most observers and is creating a substantial tailwind for global growth. In addition, consumers have proven quite resistant to a challenging economic environment. Given these factors, a global recession has become less likely overall, but global growth is expected to remain weak by historical standards. Investors and markets became more positive during the first month of 2023. However, it is unlikely that sentiment will remain this positive into the rest of the year, as risks in the form of the war in Ukraine, the imbalances in the Chinese real estate sector and inflation persist. The consumer discretionary and materials sectors outperformed the broad global market, while consumer staples and healthcare lagged.

Based on transaction prices, the fund's return was 3.31%. The RobecoSAM Sustainable Healthy Living Equities strategy performed positively in January, performing in line with its investable universe but below the broad global market. All clusters participated in the upward movement, with the healthcare-related clusters lagging the other clusters, which reflects some profit-taking in January after the outperformance of the healthcare sector last year. On an individual stock level, the biggest positive contribution came from manufacturer of biopharmaceutical compounds Lonza, as investors continue to believe in its mid-term growth and margin improvement outlook, despite some pressure in the short term from tapering Covid vaccine production and elevated capital expenses. The biggest negative contribution came from personal care company L'Occitane. The company was impacted in the short term by Covid in China, inflation in Europe and go-to-market changes to its Elemis brand in the UK.

The risks to economic growth have increased recently due to inflation, rate increases by central banks, concerns over the security of the energy supply in Europe and the pandemic policies in China. The necessary rate increases by central banks to fight inflation will dent economic growth going forward. It will therefore be even more important to focus on solid business fundamentals, pricing power and quality. We remain constructive on the mid to long-term potential of the equity markets and are making use of the current market conditions to further solidify our positions in companies that have very strong long-term business prospects. The pandemic has accelerated changes necessary to build more robust and sustainable economies. It has also made individuals more inclined to adopt a healthier lifestyle. The Healthy Living portfolio of sustainable companies is well positioned to benefit from these changes in the longer run.