Robeco New World Financials I USD

At the start of 2022, we fretted about the huge gap between nominal interest rates and inflation expectations and called the deeply negative real interest rate chart the most important macro-chart to watch. Clearly, we did not fully appreciate how quickly things would turn around. Come early May, real interest rates are back to neutral as nominal interest rates have spiked over the last couple of months, with the US 10-year Treasury trading at around 2.9% versus 1.5% at the start of the year, and the German 10-year Bund at 1.0% today versus -0.2% in late 2021. Investors continue to price in more Fed price hikes, with the market now implying a 3.0% Fed rate by February 2023, up from 2.7% last month. As a reminder, the Fed hiked its policy rate by 50 bps to 1.0% in early May, so we are in for more fireworks from the Fed in the coming months. More fundamentally, the 1Q22 earnings season is in full swing and it is interesting to note that most companies are coming through with strong numbers: over 80% of our portfolio companies that reported met or beat consensus numbers.

The fund can engage in currency hedging transactions.

The fund does not distribute dividend. Any income earned is retained, and so the fund's entire performance is reflected in its share price.

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.

Robeco New World Financials is an actively managed fund that invests in equities from developed and emerging countries all over the world. The selection of these stocks is based on a fundamental analysis. The fund's objective is to achieve a better return than the index. The fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, proxy voting and engagement. The fund invests in companies in the financial sector and can partly invest in the financial sector-oriented companies outside the formal MSCI Financials. It focuses on attractive long-term trends, such as 'digitization of financial services', 'finance and aging' and 'financial services in emerging markets'. Proprietary valuation models are used to select stocks with good earnings prospects and a reasonable valuation. The fund is not constrained by a benchmark but the fund may use a benchmark for comparison purposes. 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 can deviate substantially from the issuer, country and sector weightings of the Benchmark. There are no restrictions on the deviation from 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.