Robeco Sustainable European Stars Equities D EUR

After a 3% decline in September, European markets bounced back strongly in October, recording the strongest month since March 2021. The MSCI Europe was up roughly 5%, bringing its year-to-date performance to slightly below 22%. Utilities (+8%) were for once the best-performing sector in Europe, followed by consumer discretionary (+6.5%) and financials (+6.5%). Communication services (-2.8%) and real estate (+1.2%) were among the worst-performing sectors. The most recent update from our portfolio companies saw supply bottlenecks curbing growth and margins to a year low in some cases, while other companies continued to show tremendous order momentum, confirming a positive outlook for the remainder of the year. In the coming months, we anticipate that supply issues will be addressed, as most of our portfolio companies have successfully navigated through times of volatility in the past. Further, most of our book of companies has displayed strong pricing power in inflationary environments and should be well prepared to pass on rising costs this time around, too. This should support earnings growth in a normalized environment after a record EPS growth this year.

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.

Robeco Sustainable European Stars Equities integrates ESG at every stage of the investment process. We use sustainability performance rankings as a first indication of a company’s sustainability profile. In addition we use it to exclude the worst 20% scoring stocks from the investable universe. We then analyze 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 risks and opportunities of a company. If ESG risks and opportunities are significant, the ESG analysis may impact a stock’s fair value and the portfolio allocation decision. Throughout the investment process, we strive for a low environmental impact, as measured by GHG emissions, water use and waste generation, with the aim of realizing at least 20% better levels than the index. In addition to ESG integration, Robeco’s dedicated active ownership team conducts proxy voting and engagement activities focused on specific themes, such as climate change, aiming to improve a company’s sustainability profile. Furthermore, the fund will not invest in companies exposed to the following controversial sectors or business practices: military contracting, controversial weapons, fire arms, UN Global Compact breaches, tobacco, palm oil, nuclear power, thermal coal, arctic drilling and oil sands, according to strict revenue thresholds.

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 ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating 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, while avoiding investment in thermal coal, weapons, military contracting and companies that severely violate labor conditions, next to voting and engaging. The fund also aims for an improved environmental footprint compared to the Benchmark.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.