Robeco Emerging Markets Smaller Companies Eq.I USD

In August, the MSCI EM Midcap Index decreased by 1.53% in euros, lagging developed markets which were up 1.81% (MSCI World). US sanctions, trade tariffs and risk of contagion in emerging markets occupied the headlines, souring investor sentiment.A basket of EM currencies fell 2%. Barring the Thai baht and the Korean won, all other EM currencies were flat to down with six of them falling in excess of 5% during the month (Turkish lira, South African rand, Russian ruble, Brazilian real, Chilean peso, Colombian peso). Energy prices picked up in August: Brent crude was up 4.4%. Worst markets were Argentina, Turkey and Brazil. Brazilian equities plunged in the wake of political uncertainty. Turkish equities reflected the depreciation of the lira, as the markets suffered from the imposition of sanctions and trade tariffs by the US. Russian equities were dragged down by losses on the ruble, as investors took cognizance of rising risks of further US sanctions.China continued its downtrend as the US upped the ante in the Sino-US trade conflict. The central banks of India, Indonesia and the Philippines raised interest rates to arrest the slide in their currencies.

The fund is allowed to pursue an active currency policy to generate extra returns. However, given the high transaction costs involved, the fund will be reluctant to use this possibility.

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.

For Robeco Emerging Markets Smaller Companies Equities, ESG factors are incorporated in the investment and decision-making process. A proprietary bi-annual corporate governance questionnaire is an integral part of the fundamental framework. The team assesses shareholder, board, management, government, social and environmental factors where appropriate. The team also includes ESG considerations in their country allocation process. ESG-based considerations impact the stock valuation analysis. Relevant ESG issues are discussed with company management on a case by case basis. Input from RobecoSAM Sustainability analysts is used to further enhance ESG integration in the investment process.

Robeco Emerging Markets Smaller Companies invests globally in emerging economies. The focus is on companies which combine a sound business model and solid growth prospects with a reasonable valuation. These companies are less internationally active and their performance has a strong relation with the domestic economic development. The first step in portfolio composition is the top-down country selection, as research shows that country specific factors drive stock returns in emerging markets. The second step is in-depth fundamental analysis of companies and serves to identify stocks with the ability to outperform in the long run. Key items of our fundamental analysis are: growth prospects of sector, position of company within sector, competitive strength, financial health and strategy, corporate governance and management quality. We screen stocks with our proprietary quantitative model for attractive characteristics. Risk management is fully integrated in the investment process to ensure that positions meet predefined guidelines and the portfolio is well diversified. The fund can protect investors from negative currency developments through active currency hedging. The fund aims to be fully invested. Robeco Emerging Markets Smaller Companies aims to outperform the MSCI Emerging Markets Mid Cap Index over a full market cycle. This Sub-fund may invest in China A-shares via the QFII and/or a Stock Connect Programme which may entail additional clearing and settlement, regulatory, operational and counterparty risks.

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