Natalie Falkman is Portfolio Manager of the Robeco Circular Economy strategy and member of the Thematic Investing team. Before joining Robeco in 2022, she was a portfolio manager for Kapitalinvest, a global equity, 5-star rated by Morningstar and AAA-rated by Citywire (Global blend-category) fund at Swedbank Robur in Stockholm. Prior to that, she worked at Carnegie (largest independent investment bank in the Nordics), first as the Head of Emerging Markets Research and thereafter with Nordic Capital Goods Equity Research. She started her career in 2002 as an equity research analyst at Deutsche Bank in Moscow covering utility and shipping sectors. Natalie holds a Master’s in Finance from Stockholm School of Economics.

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 0.01% 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.

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual 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's sustainable investment objective is to finance solutions that support the transition from traditional production and consumption patterns toward a circular economy. Circular economy and sustainability considerations are incorporated in the investment process by the means of a target universe definition, exclusions, ESG integration, and voting. The fund only invests in companies that have a significant thematic fit as per Robeco's thematic universe methodology. Through screening on both Robeco's internally developed SDG Framework and Robeco’s exclusion policy, the fund does not invest in issuers that have a negative impact on the SDGs, are in breach of international norms or where products have been deemed controversial. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. In addition, where a stock issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion. Lastly, the fund makes use of shareholder rights and applies proxy voting in accordance with Robeco's proxy voting policy.For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on MSCI World Index TRN.

The positive market sentiment at the start of the year shifted to a more cautious mood by the end of February. Visibility deteriorated in both structural growth areas and cyclical sectors. For the latter, macro indicators were mixed while for the former, slower order growth was perceived as a red flag by many investors. A few key themes have emerged in year-to-date performance. One is the relatively stronger performance of European equities compared to US equities. Another noticeable trend has been the underperformance of small caps relative to large caps. A flight to safety amid a more risk-averse mood typically benefits larger corporations. Despite the risk-off sentiment at the end of February, it is important to note that the S&P 500 reached a new all-time high on February 19 – the second one this year (the previous was on January 23). A retracement in a bull market is not an anomaly. However, greater visibility on factors impacting corporate decision-making – such as tariffs, state-sponsored projects, and policies – would help companies make both short and long-term investment decisions, ultimately supporting future profits.

Based on transaction prices, the fund's return was -1.95%. In February, the fund underperformed versus the MSCI World but outperformed its internal benchmark. Versus the MSCI World, the industrial sector was by far the main performance detractor. The main three individual performance detractors were all industrial companies: Tetra Tech, Comfort Systems and Wolter Kluwer. Financials was the best-performing sector in the MSCI World in February, which negatively impacted the fund's relative performance as the strategy is underweight in financials. In terms of individual performance contributors, all top three were all European companies: EssilorLuxottica, Essity and Saint Gobain. The fund outperformed its internal benchmark. Sector-wise, the outperformance came from technology, where the fund is underweight relative to the internal benchmark, and healthcare. In healthcare, the funds does not currently own any life science tool companies, which was a positive in February. The top three individual contributors were EssilorLuxottica, Spie and Essity. The main three performance detractors were Tetra Tech, Comfort Systems and Vertiv.

The S&P 500 has already set two all-time highs this year. Despite that, as February comes to a close, the mood is not particularly cheerful. It is important to remember that retracements of around 2-6% are relatively common in a bull market – and that we are still in a (relatively young) bull market. If we view the glass as half full, the bottoming-out of cyclical demand, paired with investors' low expectations, provide a solid foundation from which companies have the ability to either surprise positively or at least meet conservative guidance. In structural growth areas, the risk-off mode appears to stem from initially stretched valuations (as we exited 2024), crowded investor positioning, the DeepSeek moment that led to questions about who the future AI winners will be, and the notion of 'normalization' in demand after two very strong years. However, structural demand itself has not yet shown any clear cracks. The economic impact of new domestic and external policies under the new US presidential administration remains an open question. Nevertheless, clarity should start emerging, while potential deregulations and lower taxes might further spur optimism.