Robeco Fashion Engagement I EUR

Dora Buckulcikova is Lead Portfolio Manager of Robeco Fashion Engagement (2023), Portfolio Manager of Robeco Global Multi-Thematic (2024), Rolinco (2022) and member of the Thematic Investing Team. She joined Robeco in 2021. Dora holds experience as a buy-side research analyst and investment manager with Baillie Gifford for 6 years. Previously, she was a research consultant for a UK-based global impact fund, providing long-term fundamental and sustainability-focused investment research. Dora is a CFA® Charterholder and obtained her Master of Arts in Economics and Chinese from the University of Edinburgh.

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 promote structural changes in the fashion industry by engaging with companies on the industry's sustainability challenges. The companies are selected by showing potential and intention to address the industry's sustainability challenges and driving systemic change for the fashion industry. The fund actively engages with at least 80% of the corporate holdings typically for a period of three to five years. The fund does not invest in stock issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. 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.

In November, markets were anything but quiet. The most headline-grabbing event was the US election. With Donald Trump leading a Republican sweep, we've seen a whirlwind of reactions in the stock market: from the potential positive effects on consumption stemming from proposed corporate and income tax reforms, to penalties for companies with overseas production stemming from increased tariffs. The ripples of the rumor mills have been far-reaching already. November featured two significant shopping holidays: Singles Day on 11 November, originating from e-commerce platforms in China, and Black Friday on the last Friday of the month, rooted in US retail tradition. Shoppers across both markets demonstrated a strategic approach to holiday spending, focusing on promotions perceived as offering the most value. This shift underscores the growing importance of targeted, thoughtful discounting to appeal to budget-conscious consumers without eroding profitability. Especially in the case of Black Friday, there is clear reversal of the post-pandemic preference for in-store shopping experiences, in favor of convenient and more transparent online shopping.

Based on transaction prices, the fund's return was 4.71%. In November, the fund delivered a strong positive absolute return but underperformed versus the MSCI ACW Index. All clusters delivered positive absolute returns, with especially strong share price reactions from the Automation & Digitalization and Casualization & Value clusters. The Automation & Digitalization (+7.8%) cluster performed well, thanks to the combination of strong results and positive momentum for US-based technology-driven companies. This included Shopify (+52%) and Zebra Technologies (+10)%. Casualization & Value (+6.8%), the strategy's largest cluster accounting for 33% of total assets, saw positive absolute performance in most stocks, particularly specialty running brands On Holdings (+26%) and Deckers Outdoor (+25%). Premiumization (+1.3%), the second-largest cluster accounting for 31% of assets, saw mixed results and mostly negative share price moves for key luxury companies Moncler (-9.0%), Prada (-8.1%) and LVMH (-2.8%). In the Sustainability & Circularity cluster (+4.6% return, 18.9% of the assets), Ingredients & Materials companies Novonesis (-3.7%) and Symrise (-5.5%) were down without any significant news.

The fashion industry has faced three unprecedented years due to the pandemic, supply chain disruptions, and economic crises. In 2024, we expect key top-down catalysts for most companies in our investment universe to restore confidence in Chinese spending, both domestically and internationally. From a sustainability perspective, we believe it is increasingly important for brands not to resort to cost-cutting measures that place undue pressure on suppliers in less developed economies. The EU is leading the way by making progress toward greater transparency and traceability through the establishment of an EPR scheme for fashion. We retain our enthusiasm and renewed conviction in the fund's dual objectives of delivering attractive long-term investment returns while driving systemic change in the industry through engagement.