RobecoSAM Sustainable Healthy Living Equities F USD

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.

After markets started the year in January on a strongly positive note, they were consolidating in February, looking for orientation as the reporting season was taking its course. While economic growth weakened into the new year, the feared recession did not take hold. Reasons for this were strength in the service sector, lower energy prices as winter weather has been quite mild so far, the perception that inflation has peaked and China reopening. While consumer demand in Europe has weakened, the US consumer has remained quite resilient. Corporate earnings were a bit of a mixed picture so far, despite a substantial lowering of expectations going into the earnings season. A higher cost base creating pressure on bottom lines, demanding valuations and cautious guidance for 2023 often drove negative stock price reactions to earnings reports, especially in the US. The information technology and industrials sectors drove the outperformance of the broad global market, while healthcare and materials lagged.

Based on transaction prices, the fund's return was -3.07%. The RobecoSAM Sustainable Healthy Living Equities strategy performed slightly negatively in February, outperforming its investable universe, but ending the month slightly below the largely flat broad global market. The Healthcare Efficiency cluster was the only one with a positive performance in February. Healthy Nutrition, Therapeutics and Healthy Lifestyle all ended the month in negative territory. The latter was particularly affected by a correction of athletic wear and personal care holdings. On an individual stock level, the biggest positive contribution came from producer of active nutrition shakes BellRing Brands. The company benefited from the return to pre-pandemic exercise routines and from the easing of the capacity restraints in shake production, which held back sales last year. Salmon farming company Bakkafrost generated the second-best positive contribution. Reported results indicated that its operations in the Faroe Islands are in good shape and that there are early signs of a turnaround in Scotland.

The risks to economic growth have increased due to inflation, rate increases by central banks, concerns over the security of the energy supply in Europe and geopolitical tensions. 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.