Robeco Sustainable European Stars Equities D EUR

Markets' hope of a more dovish rhetoric pointing to a slower rate hike has initiated an aggressive rally in equity markets since mid-month. It appears that the equity market is already looking beyond a Fed pause and hoping that it can orchestrate a soft landing. The MSCI Europe gained around 6.2% in October, after declining by around -6% in September and reaching new lows. Year-to-date, the European benchmark is now down roughly 12%. Value continued its outperformance from September, as the ongoing valuations adjustment acted as a tailwind, along with rising inflation expectations helping energy and banks. Oil prices rebounded, despite the weaker macro, as supply tightness continues to provide a boost. Thus, conventional oil and gas stocks again delivered strong positive returns, bringing the total year-to-date return to some 40%, the only positive sector in Europe. Cyclicals also generally fared better than defensives, as markets turned risk on, with industrials and information technology outperforming. Healthcare was the lone outperformer among defensives, while utilities, communication services and consumer staples underperformed.

To reduce any possibility of large currency deviations relative to the benchmark which heighten the level of risk, the fund may bring exposure into line with the currency weights of the benchmark by carrying out currency forward 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 via exclusions, negative screening, ESG integration, ESG and environmental footprint targets, 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. In addition, a negative screen is used to exclude the 20% worst ESG scoring stocks from the investable universe. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.

Robeco Sustainable European Stars Equities is an actively managed fund that invests in equities of companies that are domiciled in Europe. 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 aims for a better sustainability profile compared to the Benchmark by promoting certain E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and 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, negative screening and aims for an improved environmental footprint. The strategy combines proprietary ESG research and analysis within a disciplined and proprietary investment framework to determine a company’s intrinsic value. Our rigorous valuation approach takes advantage of market mis-pricing, leading to a concentrated portfolio of attractively-valued, high quality stocks with a higher potential to outperform the Benchmark across environmental and financial metrics. An in-house Sustainability Investing (SI) research team integrates financially-material sector and company-specific sustainability analysis into investment cases.The majority of the stocks selected through this approach will be components of the Benchmark, but stocks outside the Benchmark may be selected too. The Management Company may use its discretion to invest in companies or sectors not included in the Benchmark based upon opportunities found through fundamental or proprietary ESG research. The fund can deviate substantially from the weightings of the Benchmark. The investment strategy aims to outperform the Benchmark over the long run whilst applying market risk limits (on countries, currencies and sectors) that limit the extent of 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.