Robeco Emerging Stars Equities D USD

In November, emerging markets’ equity markets experienced a significant bounce of 4.2% in euros, performing better than the 1.2% uptick for developed markets. Key reasons for the rebounding global markets were less hawkish signals from the US Federal Reserve, a balanced outcome in the US midterm elections and lower oil prices. Brent crude price dropped by more than 20% as concerns of oversupply resurfaced. Best emerging markets were Turkey, Indonesia and India, whilst Pakistan, the UAE and Mexico were the worst performing markets. India benefited from the drop in oil prices, while Indonesia, where interest rates were increased by 25 bps, was led by the banking sector. Mexico suffered from concerns about policy uncertainty from the incoming administration of López Obrador and an interest rate hike by the central bank. During the month, there was USD 6.3 billion inflow into EM equity funds, reversing the trend of outflows in the previous half year.

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.

For Robeco Emerging Stars 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 Stars Equities invests globally in emerging economies. The focus is on companies which combine a sound business model and solid growth prospects with a reasonable valuation. 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. On average, the fund invests in 35-50 companies and portfolio construction is independent of the index. Risk management is fully integrated in the investment process to ensure that positions meet predefined guidelines and the portfolio is diversified. The fund can protect investors from negative currency developments through active currency hedging. The fund aims to be fully invested. Robeco Emerging Stars aims to outperform the MSCI Emerging Markets 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 into the investment process to ensure that positions always meet predefined guidelines.