Rolinco

Marco van Lent is the Lead Portfolio Manager for Robeco MegaTrends/Rolinco, Portfolio Manager Robeco Digital Innovations and member of the Robeco Trends Equities team. Before 2013, he managed Robeco Infrastructure Equities. Marco joined Robeco in October 2007 to co-manage two European equity funds. He worked at Van Lanschot Asset Management to manage the Van Lanschot European Equity Fund. After the acquisition of Kempen Capital Management by Van Lanschot, he worked at Kempen Capital Management for six months to manage European equity mandates. He was Portfolio Manager European equities at Philips Investment Management in the period 1999-2005 and in the period 1996-1999 he was Portfolio Manager at Van Spaendonck Asset Management. He started his investment career in 1985 as a sell-side analyst/strategist. Marco holds a Master's in Business Economics and Finance from Tilburg University. Steef Bergakker is Portfolio Manager Robeco MegaTrends/Rolinco, Portfolio Manager Robeco Digital Innovations and member of the Robeco Trends Equities team. Previously, he was trends researcher within the Trends Equities team and has authored several white papers. Before that, Steef was portfolio manager of Robeco Infrastructure Equities and Robeco Hollands Bezit. Prior to rejoining Robeco in 2008, Steef held different functions at IRIS (Institute for Research and Investment Services), the former research joint venture of Robeco and Rabobank. From 1998 through 2008 he served as head of IRIS Equity Research, and before that he worked as equity analyst for eight years. Steef started his career in the investment industry at Robeco in 1990 as an analyst. He holds a Master’s in Monetary Economics and Finance and Investments from Erasmus University Rotterdam. Dora is Portfolio Manager Robeco MegaTrends/Rolinco and a member of the Trends Equity team. She joined Robeco in 2021 and is dedicated to the MegaTrends strategy. Dora holds experience as a buy-side research analyst who held positions as analyst and investment manager with Baillie Gifford for 6 years. In the last year she was a research consultant for a large UK-based global impact fund, providing long-term fundamental, industry-agnostic and sustainability-focused investment research. Dora is a CFA charterholder and obtained her Master of Arts in Economics and Chinese from the University of Edinburgh.

The fund is established in the Netherlands. The fund is managed as a 'naamloze vennootschap' (public limited company). The fund has the status of 'fiscal investment institution' in the sense of article 28 of the Dutch Corporate-Income Tax Act 1969, and, as such, is taxed at a corporate-income tax rate of 0%.The fund is obliged to pay out the realized current income in the form of dividend within 8 months after the end of the financial year. From 1 January 2007 the fund withholds Dutch dividend tax at a rate of 15% from these dividend payments. The fund can in principle use the Dutch treaty network to partially recover any withholding tax on its income.

For private investors residing in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Participating units held by private investors who are taxpayers in the Netherlands belong in Box 3. If and insofar as an investor's net assets exceed the net wealth exemption limit, said investor is liable from 1 January to pay 1.2% annually on the balance of his or her net assets. Investors residing in the Netherlands may offset the Dutch dividend tax withheld (15% as at 1 January 2007) against their income-tax payment. Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Dutch tax-exempt bodies may seek a full refund on the 15% dividend tax withheld on dividends (25% prior to 1 January 2007). Interest income is exempt from tax withheld at source. 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 in their tax return. In principle, Dutch bodies that are subject to corporate-income tax may offset the 15% dividend tax withheld on dividends (25% prior to 1 January 2007) against the corporate-income tax and seek a refund of the excess amount. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. Shareholders who do not pay tax in the Netherlands and who are resident in countries that have a tax treaty with the Netherlands to prevent double taxation, may seek a refund for part of the Dutch dividend tax from the Dutch tax authorities, depending on the treaty. As of 1 January 2007, a pension fund having its registered office in another EU member state is also entitled to a dividend-tax refund in the Netherlands. The above is based on the current fiscal legislation and regulation.

The fund incorporates sustainability in the investment process through exclusions, ESG integration, engagement 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 investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

After a harrowing end to 2022, equity markets received some positive news in the first weeks of the year, which contributed to a strong rebound in growth-oriented funds, such as MegaTrends. The rapid change in China's zero-Covid policy and subsequent reopening appear to have improved global trading conditions, with the International Monetary Fund predicting inflation to fall and a recession to be avoided in most of the developed world in 2023. Having said that, we are wary that in most economies significant risks persist: the cost-of-living crisis is far from over and a potential re-escalation of the Russia-Ukraine war could fuel further geopolitical tensions with repercussions for equity markets.

Based on transaction prices, the fund's return was 10.16%. The fund strongly outperformed the reference index and four out of five trends delivered double-digit positive returns. The fund's largest trend, Connected Enterprise, outperformed, driven by TSMC, Salesforce and Zebra Technologies. Digital World was also up strongly, driven by the likes of NVIDIA, Amazon and Sony. The rapid end to China's zero-Covid policy and reopening of the country's economy drove a strong rebound in Chinese stocks and luxury names, leading to Emerging Middle Class outperforming strongly. Farfetch, Mercado Libre and Delivery Hero rose the most. Resource Stewardship was the best absolute performer, with stocks exposed to the automotive sector, including Tesla, Aptiv and CATL, as the most significant positive contributors. Healthy Aging lagged behind the rest of the trends due to continued perceived pressure on healthcare budgets. Intuitive Surgical, Dexcom and Lululemon all contributed negatively.

With our trends approach, we continue to focus on long-term secular trends that should drive sustainable and secular earnings growth for the companies that are exposed to them. We remain in an era in which, thanks to digitization and new technologies, we will be able to cure most diseases at lower costs, make financial services cheaper and more accessible to all and, on top of that, increase our labor productivity sustainably. Although many of the macroeconomic issues of 2022 remain far from resolved and recessionary fears across the world's largest economies persist, there remain multiple reasons for optimism. Equity valuations have come down substantially, expectations for growth moderated, and the focus on profitability has been fully reinstated. And while as long-term investors we do not pretend to have foresight on annual gyrations of the equity markets, we do think this bodes well for trend-driven stock picking in 2023.