Robeco Sustainable Global Stars Equities Fund - EUR E

Michiel Plakman is Lead Portfolio Manager and member of the Global Equity team. He is also Co-Head of Robeco’s Global Equity team. He is responsible for fundamental global equities with a focus on SDG investing and on companies in the information technology, real estate & communication services sectors, as well as portfolio construction. He has been in this role since 2009. Previously, he was responsible for managing the Robeco IT Equities fund within the TMT team. Prior to joining Robeco in 1999, he worked as a Portfolio Manager Japanese Equities at Achmea Global Investors (PVF Pensioenen). From 1995 to 1996 he was Portfolio Manager European Equities at KPN Pension Fund. He holds a Master's in Econometrics from Vrije Universiteit Amsterdam and he is a CFA® Charterholder. Chris Berkouwer is Portfolio Manager and member of the Global Equity team. He is also Deputy Lead Portfolio Manager. He is responsible for fundamental global equities with a focus on the low-carbon transition and on companies in the energy, materials and industrials sectors, as well as portfolio construction. He joined Robeco in 2010. Prior to that, he worked as an analyst for the The Hague Centre for Strategic Studies. He conducted country, industry and company research for various equity teams prior to joining the Global Equity team. He a holds Master's in Business Administration and International Public Management from the Erasmus University Rotterdam and is a CFA® Charterholder.

The fund is established in the Netherlands. The fund is managed as a 'naamloze vennootschap' (public limited company). The fund has the status of 'fiscal investment institution' in the sense of article 28 of the Dutch Corporate-Income Tax Act 1969, and, as such, is taxed at a corporate-income tax rate of 0%.The fund is obliged to pay out the realized current income in the form of dividend within 8 months after the end of the financial year. From 1 January 2007 the fund withholds Dutch dividend tax at a rate of 15% from these dividend payments. The fund can in principle use the Dutch treaty network to partially recover any withholding tax on its income.

For a private investor residing in the Netherlands, the actual received interest, dividends or capital gains are not relevant for tax purposes. For Dutch tax-resident private investors, their holdings fall under Box 3. Investors pay annual tax on a fixed yield calculated based on the value of their assets as of 1 January. The return depends on the pro-rata allocation of assets to different categories, namely savings, debts or other assets. The holdings qualify as other assets for which the return rate is set at 6.04% (as of 1/1/2024; 6.17% as of 1/1/2023). The return rate is adjusted annually based on historical returns from previous years. The balance of the different asset categories is referred to as the return base. The effective return rate is then calculated by dividing the return by the return base. This effective return rate is applied to the savings and investments base to calculate the benefit from savings and investments. The savings and investments base is equal to the return base minus the tax-free amount. Investors pay income tax (36% in 2024; 32% in 2023) on this calculated benefit from savings and investments. The withheld Dutch dividend tax (15% as of 1/1/2024) is creditable against the income tax payable for investors residing in the Netherlands. Investors who are not subject to (exempt from) Dutch corporate tax (including Dutch pension funds) are not taxed on the result obtained. Dutch exempt entities can fully reclaim the 15% dividend tax withheld on dividends.Investors subject to Dutch corporate tax may be taxed on the result obtained from their investment in the fund, including dividend income and capital gains. Dutch corporate taxpayers can, in principle, credit the withheld dividend tax (15% as of 1/1/2024) against corporate tax and, under certain conditions, credit the excess in later years. For investors outside the Netherlands, their own national tax legislation applies to foreign investment funds. Shareholders who are not subject to tax in the Netherlands and reside in countries that have a double taxation treaty with the Netherlands may, depending on the treaty, reclaim (a portion of) the Dutch dividend tax from the Dutch tax authorities. A pension fund located in another EU member state or a country that has entered into an information exchange agreement with the Netherlands and is similar to a Dutch pension fund is also entitled to a refund of Dutch dividend tax. The above is based on current Dutch tax legislation.

The fund incorporates sustainability in the investment process via exclusions, ESG integration, ESG and environmental footprint targets, and voting. The fund does not invest in issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up fundamental investment analysis to assess existing and potential ESG risks and opportunities. In the stock selection the fund limits exposure to elevated sustainability risks. The fund also targets a better ESG score and at least 20% lower carbon, water and waste footprints compared to the reference index. 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.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.

With the US elections around the corner, the markets remain in 'America first' mode for the time being, with erratic US flows resulting in a relatively flat global equity performance overall (+0.8% in EUR; -2.0% in USD). During the month of October we saw market breadth narrowing again on rising bond yields, resulting in an exodus from commodities (barring gold) and deep cyclicals, to the benefit of the mega caps. The move up in bond yields after the Fed actually cut rates recently is noteworthy, which likely implies an improving US economy, spurring fears in the bond market that the Fed's cut has been too large. Others point at fears of higher inflation and rising budget deficits, especially in the scenario of a Trump election win. We actually see higher spending and increasing debt levels under both presidents, with a clean 'sweep' of either candidate having a greater impact on markets than a 'gridlock' outcome. In any case, the US elections are a risk event which is good to leave behind us, so that investors can move on and focus on company fundamentals again.

Based on transaction prices, the fund's return was 0.17%. In October, the portfolio had a small positive absolute return, though slightly lagging the world index. Sector-wise, our positioning in real estate and consumer discretionary helped performance most, while the sectors industrials and healthcare lagged. In terms of stock selection, online travel operator Booking Holdings contributed most. Its strong results were driven by a rebounding European travel market, solid Asian bookings numbers and Booking's alternative accommodation business growing rapidly. Booking's initiatives around alt accommodations, Connected Trip and the use of AI for more personalized offerings should provide more runway for growth. CBRE group also performed well. Its large earning beat was driven by broad-based strength across all its divisions including workplace solutions, advisory business and property management. Even though margins expanded subsequently, on the back of which guidance was raised, there still seems to be more room for further upside.

At the time of writing, betting odds are hinting at a clear victory for former President Trump. However, such polls are far from perfect and the margin of error remains high, with neither candidate having sufficient leads to label them as clear winners, especially not in any of the so-called Swing States. The current market set-up seems to imply a 'travel-and-arrive' in case Trump indeed wins, which could potentially unwind in case Kamala Harris turns out victorious. We realize plenty of ink has been spilled on how market reactions to elections are noisy, so we prefer to take a wait-and-see approach and look for certain policy choices that can drive durable moves. Hence, although elections are incredibly important, both patience (and plans) are a virtue, which should prevent us from getting lost in the noise. With our quality-focused and balanced portfolio strategy, we can be relatively agnostic as to what market environment will prevail, which should help in the uncertain times we are in today.