Robeco Circular Economy D USD

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 0.05% 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'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.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 MSCI World Index TRN.

Up until the very last day of the month, equities seemed largely unbothered by the close US election, the rising 10-year US yields, and the US inflation persisting for longer. After coming very close to ending the month in the green, on the last trading day, many equity indices were pushed into the red. In the real economy, the Q3 results painted a mixed picture of the underlying demand. The areas that benefit from structural tailwinds continue to show good growth. However, outside of those verticals, the demand is muted. Many companies mentioned customers' decision inertia holding back demand. This could be a more temporary factor; after all, it is not only the equity investors that do not appreciate uncertainty. Turning to history for guidance, investment activities seem to pick up after elections. It is worth mentioning the state of the rate-sensitive housing market in the US. The majority of the residential construction companies still observe muted demand. However, there are some green shoots that could be pointing to the pent-up demand in need of being released sooner rather than later.

Based on transaction prices, the fund's return was -2.12%. In October, the fund's performance was in line with the MSCI World. Although we always strive to outperform, October returns can be viewed as good. This is due to the fact that out of four sectors that finished the month in green, two are not part of the fund's mandate (financials and energy) and the fund only has limited exposure to the third one: the communication services sector (dominated by Alphabet, Meta and Netflix). The sector allocation component was expectedly negative. However, it was compensated by the strong stock selection performance. Looking at the positive relative contribution, Sprouts Farmers Market and a number of industrial holdings stand out. Invitation Homes, L'Oréal and Xylem were the main relative performance detractors, all three delivered results that were below expectations. The strategy outperformed its internal benchmark. Sprouts Farmers Market and NVIDIA stand out when it comes to positive contribution to outperformance. The outperformance was also supported by a number of industrials and the strategy's lower exposure to the life science tools companies.

November is to start with a bang. We have the hotly anticipated US presidential election outcome, the next FOMC rate decision and a continued intense stream of quarterly earnings, all in the first full week of the month. The wait-and-see decision inertia ahead of the US election has been cited by many companies in their Q3 results. Historically, investment activity tends to improve after elections. The earlier hopes of inflection points in the more cyclical parts of the economy have been scaled back. Nevertheless, independently if we are in an L-shaped (or any other letter-shaped) recovery, 2025 should witness the cyclical parts of the market doing better than in 2024. We see geopolitical uncertainty as a continued luring risk that the market prefers to disregard for now. The importance of the US with its far-reaching financial powers means that the next president of the US will be an important factor, influencing the direction of the policies and outcomes globally.