Robeco Asia-Pacific Equities I EUR

Asian markets finished the month nearly unchanged in October, while equity markets in the US and Europe rallied 5-7%. Weak currencies in Japan (-4% vs USD) and South Korea (-3%) eroded returns. Anticipation of rate hikes in the US has a negative impact on Asia. There is fear of lower growth having an impact on cyclical markets. China only grew 3.9% in Q3 and 3% in industrial production in September. However, the Chinese equity market recovered 3% after a heavy loss in Q3. Inflation continues to be in the spotlight, but is still at an early stage in Asia: Japan CPI came in at 0.2%. Though the impact of government forced mobile phone tariff cuts depressed the number by >1%. China CPI was just 0.7%. In both countries, the producer prices are up sharply: 6.3% in Japan and in China as much as 10.7%! Thus in their earnings releases, we saw quite a few companies there report margin pressure from input price increases. A few Asia-Pacific countries relaxed anti-Covid measures, as case numbers continued to come down. Remarkable is that in countries like Indonesia and India, cases continue to fall sharply, even though vaccination rates are still lower than 25%. Sentiment has improved sharply in both developing nations.

The fund is allowed to pursue an active currency policy to generate extra returns.

The fund does not distribute dividend. The fund retains any income that is earned and so its entire performance is reflected in its share price.

Robeco Asia-Pacific Equities integrates ESG factors into its investment process by analyzing the impact of financially material ESG factors to a company’s competitive position and value drivers. We believe that this enhances our ability to understand existing and potential (long-term) risks and opportunities of a company. The impact of material ESG factors can be positive or negative, reflecting risks or opportunities, that ensue from a company’s ESG analysis. If ESG risks and opportunities are significant, the ESG analysis could impact a stock’s fair value and the portfolio allocation decision. In addition to ESG integration, Robeco also has an exclusion policy and conducts proxy voting and engagement activities focused on specific themes, such as climate change, aiming to improve a company’s sustainability profile.

Robeco Asia-Pacific Equities is an actively managed fund that invests in stocks in developed and emerging Asian-Pacific countries. The selection of these stocks is based on fundamental analysis. The fund's objective is to achieve a better return than the index. The fund promotes ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrates ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, next to voting and engaging. The fund focuses on stocks of companies incorporated in Asia, Australia or New Zealand or those companies that exercise major part of economic activity from these regions. Country allocation is a less important performance driver, implemented via country and currency overlays. The majority of stocks selected will be components of the Benchmark, but stocks outside the Benchmark may be selected too. The fund can deviate substantially from the weightings of the Benchmark. The fund aims to outperform the Benchmark over the long run, whilst still controlling relative risk through the applications of limits (on countries and sectors) to the extent of deviation from the Benchmark. This will consequently limit the deviation of the performance relative to the Benchmark. The Benchmark is a broad market weighted index that is not consistent with the ESG characteristics promoted by the fund.

Risk management is fully integrated into the investment process to ensure that positions always meet predefined guidelines.