Robeco Emerging Stars Equities D USD

In September, the MSCI Emerging Markets Index dropped by 2.2% in euro terms, marginally better than the 2.4% decline for developed markets. Important developments were the rise in US bond yields following a more aggressive tapering timeline by the Fed, and rising oil and gas prices. As a consequence, oil and gas exporting countries such as Russia and the Middle Eastern countries were among the best-performing countries. Brazil was the worst-performing country, affected by a larger-than-expected 1% interest rate hike and potential weaker commodity demand from China. Several other emerging countries, including Russia, Mexico, Hungary and Peru also hiked interest rates, but to lesser degree. Turkey was the exception with a 1% interest rate cut to 18%. However, this was not seen as a sign of strength and led to a lower stock market and exchange rate. Within China, several regions had to impose power cuts, and the highly leveraged property developer Evergrande is facing a potential default. This has raised general concerns on systematic risks to the financial and property sector, but China is likely to manage any potential default or restructuring in a controlled manner.

The fund is allowed to pursue an active currency policy to generate extra returns and can engage in currency hedging transactions.

In principle, the fund does not intend to distribute dividend and so both the income earned by the fund and its overall performance are reflected in its share price.

Robeco Emerging Stars 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 Emerging Stars Equities is an actively managed fund that invests in emerging countries equities all over world. The selection of these shares is based on a 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 proxy voting and engagement. The fund selects investments based on a combination of top-down country analysis and bottom-up stock selection. We focus on companies that have both a healthy and solid business model growth prospects as a reasonable valuation. The fund has a focused, concentrated portfolio with a small number of larger bets. 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 VaR Ratio) 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.