Putting our researchers’ minds to use in emerging markets

• All investment decisions should be research driven. This was our founders’ firm belief and it is especially true for emerging markets, where data can be challenging due to shorter time series or the need for data cleansing. A strong focus on research and data analysis is pivotal to finding opportunities in inefficient markets and benefiting from the risks and opportunities. Robeco researchers, for example, have published a fantastic collection of articles demonstrating the success of factor investing in emerging markets. But the real beneficiaries of these insights are our clients. A wide range of EM strategies are based on our established factor investing models, from low volatility to enhanced indexing, to sustainable versions with specific carbon targets.

• Factors work better in emerging markets—the less mature the market is, the larger returns from anomalies are. A wide range of EM strategies are based on our proven factor investing models, from low volatility to enhanced indexing, to sustainable versions with specific carbon targets. We were one of the first to offer quantitative emerging market strategies and to launch a low-volatility strategy, and to develop Chinese A-shares quant strategies. Our Quantitative Equities team now manages over USD 25 billion (December 2019) in emerging markets strategies.

  Our strategies

ESG Integration in emerging markets: challenging but crucial

• Emerging markets often feature poor transparency, lower governance standards, human rights issues, and lack product safety standards. Integrating ESG in investment decisions is a challenge. However, in emerging markets most of all, researching ESG data in-depth is key to uncovering ESG-related risks and unlocking the potential source of alpha in ESG information for investors.

  We integrate ESG analysis into the investment decision-making process for all our emerging market capabilities. And our emerging markets team has incorporated sustainability into its company analysis for over 15 years and been conducting its proprietary ESG survey since 2001.

• 

• Robeco has long been an advocate of sustainable investing in general, and in emerging markets in particular. We started to explicitly integrate ESG criteria into our investment processes for emerging markets equities more than ten years ago. Prior to that, we had already been including certain governance aspects in our processes since 2001 by sending a corporate governance-related questionnaire to listed companies.

• Today, depending on their sustainability requirements and objectives, we offer investors three main types of sustainable investing solutions: Inside, Focused and Impact. Although these offer different levels of sustainability integration, they do all share the same ESG integration process, as well as our active ownership offering, which includes voting and engagement.

  Active ownership