Robeco Emerging Markets Smaller Companies Eq.D EUR

In October, the MSCI EM Midcap Index declined 0.07% (EUR), underperforming developed markets, which were up 5.82%. The main reason for the less bullish environment were the tighter financial conditions, with interest rate hikes in EMEA and Latin America. In general, cyclical stocks outperformed defensive stocks. EMEA was the strongest region, led by Russia and Saudi Arabia, on the back of higher energy prices. Turkey was dragged down by continued depreciation of the lira, with rates now below inflation after a 2% rate cut. Latin America was weighed down by Brazil, which felt the impact of the resignation of 4 treasury officials amidst continued domestic outflows following the 575 basis points rate hike year-to-date. Investors remain wary about uncertainty in Chile ahead of the November elections, while Peru underperformed after the cabinet reshuffle. EM equity funds saw subscriptions of another USD 5 billion in October, bringing the year-to-date inflows to USD 105 billion.

The fund is allowed to pursue an active currency policy to generate extra returns. However, given the high transaction costs involved, the fund will be reluctant to use this possibility.

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.

Robeco Emerging Markets Smaller Companies Equities integrates ESG factors into its investment process by analyzing 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 (long-term) risks and opportunities of a company. The impact of material ESG factors can be positive or negative, reflecting risks or opportunities, that ensue from a company’s ESG analysis. If ESG risks and opportunities are significant, the ESG analysis could impact a stock’s fair value and the portfolio allocation decision. In addition to ESG integration, Robeco also has an exclusion policy and conducts proxy voting and engagement activities focused on specific themes, such as climate change, aiming to improve a company’s sustainability profile.

Robeco Emerging Markets Smaller Companies is an actively managed fund which invests in stocks of small and midsized companies located in emerging countries across the world. 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 promotes ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrates 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, next to voting and engaging. The fund selects investments based on a combination of top-down country analysis and bottom-up stock ideas. The focus is on companies with a sound business model, solid growth prospects and reasonable valuation.The majority of stocks selected through this approach will be components of the Benchmark, but stocks outside the Benchmark index may be selected too. The fund can deviate substantially from the weightings of the Benchmark. The investment policy is not constrained by a benchmark but the fund may use a benchmark for comparison purposes. The fund can take a substantial active risk. 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 in the investment process to ensure that positions always meet predefined guidelines.