Robeco Sustainable European Stars Equities G EUR

After seven consecutive months of positive returns, European stock markets closed September in the red. The MSCI Europe declined by 3% over the course of the month, but remains comfortably in positive territory for the year (+17% YTD, incl. dividends). The decline in European equity prices was part of a global cool-down in risk sentiment after the historic Q2 earnings season had buoyed investor optimism during the summer. Part of the shift in sentiment was triggered by the Federal Reserve signaling that tapering is likely to start before the end of this year and could already be concluded by mid-2022. Risk sentiment was also affected by the financial distress at China's largest real estate development company Evergrande, which raised concerns of a growth slowdown in the broader Chinese economy, given that the real estate sector accounts for almost a third of the country's GDP. The dominating issue in Europe, however, has been the looming energy crisis, as natural gas prices have soared to record highs in reaction to tight supplies and record-low storage levels ahead of the cold winter months.

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 distributes a dividend on an annual basis.

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.