Robeco Sustainable Diversified Allocation D EUR

Ernesto Sanichar is Portfolio Manager and member of the Sustainable Multi Asset team. He responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. His asset specialties are fixed income and FX. He has been part of Robeco's Investment Solutions department since 2005. Previously, he was Treasury Manager for four years. Prior to joining Robeco in 2001, Ernesto worked at ING Barings as a Product controller at the cash equities and derivatives desk for three years. Ernesto started his career in the investment industry in 1998. He holds a Master's in Financial Economics from Erasmus University Rotterdam. Mathieu van Roon is Portfolio Manager and member of the Sustainable Multi Asset team and is responsible for the Robeco Multi Asset funds, Robeco ONE and Defined contribution funds. He joined Robeco in 2011 within the Structured Investments department. Mathieu holds a Master’s in both Business Economics and Econometrics (cum Laude) from Erasmus University Rotterdam and is a Financial Risk Manager (FRM) charterholder.

The fund is established in Luxembourg and is subject to the Luxembourg tax laws and regulations. The fund is not liable to pay any corporation, income, dividend or capital gains tax in Luxembourg. The fund is subject to an annual subscription tax ('tax d'abonnement') in Luxembourg, which amounts to 0.05% of the net asset value of the fund. This tax is included in the net asset value of the fund. The fund can in principle use the Luxembourg treaty network to partially recover any withholding tax on its income.

The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise investors to consult their financial or tax adviser about the tax consequences of an investment in this fund in their specific circumstances before deciding to invest in the fund.

The fund invests a minimum of 80% in Robeco managed or externally managed funds which are classified as Article 8 or 9 under SFDR. For direct line investments, the fund incorporates sustainability in the investment process via exclusions, negative screening, ESG integration, targets on investments in companies and countries based on ESG performance as well as engagement and a minimum allocation to ESG-labeled bonds. For government and government-related bonds, the fund complies with Robeco’s exclusion policy for countries, excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption', and ensures investments have a minimum weighted average score of 6 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. For corporate bonds, the fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile as well as excludes companies with high or medium negative SDG scores following Robeco's internally developed three-step SDG framework. Where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on 50% MSCI All Country World Index (USD) 50% Bloomberg Global Aggregate(hedged to EUR and denominated into USD).

Donald Trump won the Presidential election while his Republican party retook the Senate and won control of the House. This red sweep solidifies a unified Republican government. Equities reacted positively - particularly small and mid-cap US stocks as Trump's agenda includes policies that will likely boost corporate earnings via tax cuts and deregulation. So far, Trump has announced tariffs of 10% on goods from China and 25% on products from Mexico and Canada. This, combined with a stronger US dollar and less supportive US monetary policy, were headwinds for emerging markets. Equities in Europe also struggled due to tariff concerns, combined with earnings warnings from the automotive and consumer goods sectors. In fixed income, worries about higher US inflation reduced US rate cut expectations. On the flip side, more rate cuts are seen as likely in Europe – so duration added more to bond returns in Europe vs the US. French bond spreads widened due to a political standoff over the country's budget, with Prime Minister Michel Barnier's warning of a financial 'storm' if lawmakers reject budget proposals.

Based on transaction prices, the fund's return was 3.15%. The Sustainable Diversified Allocation Fund was up 3.7% in November, taking the total return year-to-date to more than 13%. The overweight in equities and underweight in high yield and credit was the right call. Similarly, the decision to add US government bond duration mid-month played out well. Trump's re-election was initially met with worries over rising inflation and rising fiscal deficits. Bond yields initially rose towards 4.5% but settled down quickly afterward. Developed equities contributed positively, especially coming from the US stock market. One of the largest active positions is in JPMorgan Chase, which reported better than expected earnings at the start of November. However, the emerging market exposure was hit by negative security selection and exposure to some of the regions that are feared to be worse affected by Trump's trade tariffs. In credits, regional differences were significant, with Europe's fragile economy and French political turmoil leading to wider spreads in the European market. Conversely, US credits performed well due to the resilience of the US economy and the planned business-friendly policies planned of the Trump administration.