Robeco Capital Growth Funds - Argenta€¦ · J.P. Morgan, with its global network, will provide operations activities to Robeco in multiple locations and time zones. This will enable

Robeco Capital Growth Funds

Société d’Investissement à Capital Variable

Incorporated under Luxembourg law

RCS B58 959

Semi-Annual Report1 January – 30 June 2018

Robeco Capital Growth Funds 2

Contents

General Information 4

Report of the Board of Directors 6

General 6

General introduction 9

Risk management 10

Fund governance 11

Sustainability investing 11

Global Equity sub-funds 14

Regional & Country Equity sub-funds 24

Theme Equity sub-funds 33

Global Bond sub-funds 37

Regional Bond sub-funds 44

Asset Allocation sub-funds 49

Other data 50

Financial statements 70

Statement of net assets 70

Number of shares outstanding 90

Notes to the financial statements as at 30 June 2018 105

Investment portfolio 213

Robeco BP Global Premium Equities 213

Robeco QI Global Conservative Equities 215

Robeco Global Stars Equities 218

Robeco Emerging Stars Equities 219

Robeco Emerging Markets Equities 220

Robeco QI Emerging Markets Active Equities 222

Robeco QI Global Momentum Equities 226

RobecoSAM QI Global Sustainable Equities 229

Robeco QI Emerging Markets Enhanced Index Equities 239

Robeco QI Emerging Conservative Equities 246

Robeco Emerging Markets Smaller Companies Equities 250

Robeco QI Global Value Equities 252

Robeco QI Global Developed Multi-Factor Equities 255

Robeco QI Global Developed Conservative Equities ex Japan 263

Robeco QI Emerging Markets Sustainable Active Equities 266

Robeco Emerging Opportunities Equities 269

Robeco QI Global Developed Conservative Equities 271

Robeco QI Global Developed Active Equities 274

Robeco QI Customized Enhanced Index Equities I 277

Robeco QI Global Quality Equities 301

Robeco QI Global Sustainable Conservative Equities 304

Robeco QI Global Developed Enhanced Index Equities 307

Robeco Asia-Pacific Equities 317

RobecoSAM Sustainable European Equities 319

Robeco QI European Conservative Equities 320

Robeco QI US Conservative Equities 323

Robeco BP US Premium Equities 325


Robeco Chinese Equities 327

Robeco Indian Equities 328

Robeco Asian Stars Equities 329

Robeco BP US Large Cap Equities 330

Robeco BP US Select Opportunities Equities 331

Robeco QI Asia-Pacific Active Equities 333

Robeco QI Continental European Conservative Equities 335

Robeco Chinese A-share Equities 337

Robeco QI Chinese A-share Active Equities 338

Robeco QI US Enhanced Index Equities 341

Robeco QI European Enhanced Index Equities 346

Robeco New World Financial Equities 351

Robeco Property Equities 353

Robeco Global Consumer Trends Equities 355

RobecoSAM Sustainable Food Equities 356

Robeco Global Growth Trends Equities 357

Robeco Global Industrial Innovation Equities 359

Robeco Global FinTech Equities 360

Robeco High Yield Bonds 361

Robeco Emerging Credit 375

Robeco Emerging Debt 380

Robeco Global Credits 383

Robeco QI Dynamic High Yield 390

Robeco QI Global Multi-Factor Credits 391

Robeco Global Absolute Return Bond Fund 401

Robeco Global Credits – Short Maturity 403

Robeco Corporate Hybrid bonds 407

Robeco QI Global Multi-Factor High Yield 409

Robeco Credits Income 414

RobecoSAM Global SDG Credits 416

Robeco Euro Government Bonds 419

Robeco Euro Credit Bonds 422

Robeco All Strategy Euro Bonds 427

Robeco European High Yield Bonds 433

Robeco Euro Sustainable Credits 437

Robeco Financial Institutions Bonds 443

Robeco Investment Grade Corporate Bonds 446

Robeco QI GTAA Plus 450

Robeco QI Global Diversified Carry 451

Note: In this report the abbreviated names of the sub-funds will be used, i.e. without the prefix 'Robeco Capital Growth Funds'.


General Information Robeco Capital Growth Funds (hereafter ‘the Company’)

Undertaking for collective investment in transferable securities incorporated as a ‘Société d’Investissement à Capital

Variable’ (SICAV) under Luxembourg law.

Register of Companies

RCS Luxembourg B 58 959

Registered Office

Centre Etoile

11/13, Boulevard de la Foire

L-1528 Luxembourg

Grand Duchy of Luxembourg

Board of Directors

J.H. (Jeroen) van den Akker, Director, Robeco, Rotterdam, The Netherlands

D.R. (Rob) van Bommel, Managing Director, Robeco, Rotterdam, The Netherlands

H.P. (Pierre) de Knijff, Director, Robeco, Rotterdam, The Netherlands

Management Company

Robeco Luxembourg S.A.

5, Heienhaff

L-1736 Senningerberg


Cabinet de révision agréé (independent auditor)

KPMG Luxembourg, Société coopérative

39, Avenue John F. Kennedy

L-1855 Luxembourg


Depositary, Domiciliary and Paying Agent

RBC Investor Services Bank S.A.

14, Porte de France

L-4360 Esch-sur-Alzette


Administration Agent and Registrar


Delegated to:

RBC Investor Services Bank S.A.

14, Porte de France

L-4360 Esch-sur-Alzette


Investment Adviser


Delegated to:

Robeco Institutional Asset Management B.V. (“RIAM”)

Weena 850, NL-3014 DA Rotterdam, The Netherlands

Investment Sub-Advisers

Boston Partners Global Investors Inc.

909, Third Avenue

USA – New York, NY 10022


Robeco Hong Kong Ltd

2704-07, 27F

Man Yee Building

68 Des Voeux Road Central

Central, Hong Kong

RobecoSAM A.G.

Josefstrasse 218

8005 Zurich, Switzerland

Subscriptions and publications No subscription can be accepted on the basis of financial reports such as this report. Subscriptions may only be accepted

on the basis of the current prospectus, supplemented by the Company’s latest annual report, and in the event that the

Company’s annual report has been published more than eight months previously, its latest semi-annual report. Financial

reports, the prospectus and Key Investor Information Document are available in through the website www.robeco.com

and may be obtained free of charge at the Company’s registered office.

Representative and paying agent in Switzerland Robeco Switzerland A.G., Josefstrasse 218, CH-8005 Zurich, is the Company’s appointed representative in Switzerland.

Copies of the Key Investor Information Document and prospectus, Articles of incorporation, (semi) annual reports and a

list of all purchases and sales in the investment portfolio during the reporting period are available from the above address

free of charge. UBS Switzerland A.G., Bahnhofstrasse 45, CH-8001 Zurich (Postal address Badenerstrasse 574, Postfach,

CH-8098 Zürich) is the Company’s paying agent in Switzerland.

Information service in Germany Copies of the articles of incorporation, Key Investor Information Document and prospectus and the annual and semi-

annual reports may be obtained free of charge from the offices of the information service in Germany: Robeco

Deutschland, Taunusanlage 17, D-60325 Frankfurt am Main. The prices at which shares are issued and repurchased are

published in the Stock Exchange Gazette. A list of all purchases and sales in the Company’s investment portfolio during the

reporting period is available at the paying agent/information service in Germany free of charge.

Representative in Hong Kong RBC Investor Services Trust Hong Kong Ltd, 51st Floor Central Plaza, 18 Harbour Road, Wanchai, Hong Kong.

Representative in Taiwan Nomura Asset management Taiwan Ltd -30F, No.7, Sec. 5, Xinyi Road, Taipei 110,Taiwan.

Language versions This report is also published in German. Only the English edition is binding and will be submitted to the general meeting

of shareholders.


Report of the Board of Directors General

Website

Up-to-date information about the sub-funds’ investment policies, performance, and investment portfolios can be found

on www.robeco.com/luxembourg.

Outsourcing part of the operations activities to J.P. Morgan

On 24 January 2018, Robeco announced that it is outsourcing part of its operations and administration activities to J.P.

Morgan. The decision to outsource is part of the Robeco’s strategic plan for 2017-2021, which envisages further

international growth in both investment and client-servicing activities. J.P. Morgan will become Robeco’s service provider

for fund accounting, operations, custody, depositary, transfer agency and securities lending. In view of this broader

Robeco strategy, Robeco Luxembourg S.A. has consequently decided to outsource TA and Administration to J.P. Morgan

and Robeco QI Global Dynamic Duration has decided that J.P. Morgen will become its depositary and lending agent.

J.P. Morgan, with its global network, will provide operations activities to Robeco in multiple locations and time zones. This

will enable a smarter deployment of Robeco’s global trading support activities. Utilizing J.P. Morgan’s global scale,

technology and execution capacity will also increase Robeco’s capacity to adapt to a changing market and facilitate the

development of more sophisticated instruments and products. This will allow Robeco to continue to provide solutions that

are tailored to its clients’ needs, now and in the future. In addition, outsourcing will enable Robeco to respond more

swiftly to client requests in all the different time zones where the company’s clients are located.

The outsourcing of operations activities will not lead to changes in investment policies and teams. Client portfolios will

continue to be managed according to their investment policies by the responsible portfolio managers and portfolio

management teams. All portfolio managers will stay fully focused on delivering investment performance for Robeco’s

clients.

Voluntary winding up of Robeco Indian Equities (Mauritius) Ltd

On 27 March 2017, the Company (in its capacity as sole shareholder) has decided to voluntary wind up its Mauritian

subsidiary, Robeco Indian Equities (Mauritius) Ltd. Due to changes of the fiscal situation in India, it is no longer beneficial

to invest indirectly through this Mauritian subsidiary. Until that date, the directors of Robeco Indian Equities (Mauritius)

Ltd were:

Paul A.G. van Homelen, Chairman, Executive Director, Robeco Group, Rotterdam, the Netherlands

Stefan Gordijn, Executive Director, Robeco Group, Rotterdam, the Netherlands

D. Rob van Bommel, Managing Director, Robeco Group, Rotterdam, the Netherlands

Shahed Hoolash, Head of Transaction Management Group, Deutsche International Trust Corporation (Mauritius) Limited

Ravi Cunnoosamy, Global Business Manager for Corporate Services, Deutsche Bank (Mauritius) Limited.

The Company in its capacity as sole shareholder, has appointed Mr. Paul Gerard Lincoln of Ernst & Young in Mauritius as

liquidator for the purpose of winding up the affairs of Robeco Indian Equities (Mauritius) Ltd.

Independent Auditor of the Mauritian Subsidiary (in liquidation)

KPMG Mauritius

KPMG Centre

31, Cybercity, Ebene

Mauritius New sub-funds

Robeco QI Global Developed Active Equities was launched on 2 March 2018.

Robeco QI Global Multi-Factor High Yield was launched on 5 June 2018.

Robeco Credits Income was launched on 20 April 2018.

RobecoSAM Global SDG Credits was launched on 16 May 2018. Sub-funds closed

Robeco BP European Premium Equities was closed on 7 March 2018


Sub-fund name changes

The following sub-fund names have been changed during the year:

Old sub-fund name New sub-fund name Effective date

RobecoSAM Sustainable Agribusiness Equities RobecoSAM Sustainable Food Equities 04/06/2018

New share classes

Activation of share classes

Sub-fund Share class Effective date

Robeco BP Global Premium Equities Z USD 22-02-2018

Robeco QI Global Conservative Equities M2 EUR 28-06-2018

Robeco Emerging Stars Equities IE EUR 28-06-2018

Robeco Emerging Markets Equities M2 EUR 28-06-2018

Robeco QI Emerging Markets Active Equities G EUR 25-01-2018

Robeco QI Global Developed Sustainable Enhanced Index Equities I CHF 27-03-2018

Robeco QI Emerging Markets Sustainable Active Equities I AUD 27-03-2018

Robeco QI Emerging Markets Sustainable Active Equities Z EUR 24-05-2018

Robeco QI Global Developed Conservative Equities IH EUR 27-03-2018

Robeco QI Global Developed Active Equities I EUR 02-03-2018

Robeco QI Global Sustainable Conservative Equities Z EUR 24-05-2018

Robeco QI Global Developed Enhanced Index Equities I JPY 24-05-2018

RobecoSAM Sustainable European Equities IE EUR 24-05-2018

Robeco QI European Conservative Equities M2 EUR 28-06-2018

Robeco QI US Conservative Equities M2 USD 28-06-2018

Robeco BP US Premium Equities FH CHF 22-02-2018

Robeco BP US Premium Equities IB USD 26-04-2018

Robeco Chinese Equities IBH EUR 25-01-2018

Robeco Asian Stars Equities IL JPY 22-03-2018

Robeco BP US Large Cap Equities G EUR 25-01-2018

Robeco BP US Large Cap Equities G USD 25-01-2018

Robeco New World Financial Equities IE EUR 24-05-2018

Robeco New World Financial Equities FH EUR 28-06-2018

Robeco Global Consumer Trends Equities FH EUR 28-06-2018

Robeco Global FinTech Equities F GBP 25-01-2018

Robeco High Yield Bonds Z2H USD 15-05-2018

Robeco Global Credits Z2H EUR 15-05-2018

Robeco Global Credits IBH JPY 24-05-2018

Robeco Global Credits IE USD 24-05-2018

Robeco QI Global Multi-Factor Credits ZH EUR 24-05-2018

Robeco QI Global Multi-Factor High Yield BH EUR 05-06-2018

Robeco QI Global Multi-Factor High Yield FH EUR 05-06-2018

Robeco QI Global Multi-Factor High Yield IH EUR 05-06-2018

Robeco QI Global Multi-Factor High Yield Z USD 05-06-2018

Robeco QI Global Multi-Factor High Yield BH USD 05-06-2018

Robeco QI Global Multi-Factor High Yield FH USD 05-06-2018

Robeco QI Global Multi-Factor High Yield IH USD 05-06-2018

Robeco Credits Income BxH EUR 20-04-2018

Robeco Credits Income CH EUR 20-04-2018

Robeco Credits Income IH EUR 20-04-2018

Robeco Credits Income BxH USD 20-04-2018

Robeco Credits Income CH USD 20-04-2018

Robeco Credits Income IH USD 20-04-2018

Robeco Credits Income ZH USD 24-05-2018


Activation of share classes


RobecoSAM Global SDG Credits CH EUR 16-05-2018

RobecoSAM Global SDG Credits DH EUR 16-05-2018

RobecoSAM Global SDG Credits IH EUR 16-05-2018

RobecoSAM Global SDG Credits CH USD 16-05-2018

RobecoSAM Global SDG Credits DH USD 16-05-2018

RobecoSAM Global SDG Credits IH USD 16-05-2018

RobecoSAM Global SDG Credits ZH EUR 24-05-2018

Robeco Euro Government Bonds IEH EUR 24-05-2018

Robeco Euro Sustainable Credits IEH EUR 24-05-2018

Robeco Euro Sustainable Credits ZH EUR 24-05-2018

Robeco Euro Sustainable Credits IH GBP 24-05-2018

Robeco Financial Institutions Bonds BH HKD 22-02-2018

Robeco Financial Institutions Bonds IBH HKD 22-02-2018

Robeco Financial Institutions Bonds Z2H EUR 24-05-2018

Deactivated share classes

Deactivation of share classes


Robeco BP Global Premium Equities IB EUR 12-06-2018

Robeco QI Global Conservative Equities D2 USD 12-06-2018

Robeco QI Emerging Markets Active Equities D2 USD 12-06-2018

Robeco Emerging Markets Smaller Companies Equities M USD 5-03-2018

Robeco QI Global Developed Multi-Factor Equities B EUR 12-06-2018

Robeco Asia-Pacific Equities IM USD 12-03-2018

Robeco QI US Conservative Equities DH USD 12-06-2018

Robeco QI US Conservative Equities MH USD 12-06-2018

Robeco BP US Premium Equities IM USD 12-03-2018

Robeco Indian Equities I USD 5-02-2018

Robeco Asian Stars Equities IL EUR 12-06-2018

Robeco BP European Premium Equities B EUR 6-03-2018

Robeco BP European Premium Equities C EUR 6-03-2018

Robeco BP European Premium Equities D EUR 6-03-2018

Robeco BP European Premium Equities F EUR 6-03-2018

Robeco BP European Premium Equities I EUR 6-03-2018

Robeco BP European Premium Equities D USD 6-03-2018

Robeco BP European Premium Equities F USD 6-03-2018

Robeco BP European Premium Equities I USD 6-03-2018

Robeco Financial Institutions Bonds ZH EUR 23-03-2018

Changes to the prospectus

Some changes (effective May 2018) have been made to the Company's prospectus. A letter to shareholders detailing

these changes is available at the Company’s registered office.


General introduction

Economy

The positive economic picture that began in 2017 was maintained in the first half of 2018. The global economy continued

to expand abundantly, contrary to the preceding year with economic growth more clearly concentrated in the developed

economies, in particular the United States. The current expansion in the United States is now the second longest in post-

war history. Global growth eased slightly from the (very) rapid growth in the second half of 2017, due to a reduction in

the volume of global trade and a lower contribution from consumer spending. The emerging markets were the most

affected by this. Further increases in industrial capacity utilization, tighter labor markets, rising rents and a strong rally in

the oil price put a brake on a further acceleration of economic growth and also generated mild inflationary pressure.

Inflation forecasts rose slightly in the financial markets and are now around levels consistent with the medium to long-

term inflation targets of the central banks. Global growth is expected to reach 3.8% in 2018, in line with the previous

year.

US economic growth reached 2.6% in real terms in the first quarter of 2018, which is above the balanced long-term

trend. Strong growth in investment, partly in response to rising capacity utilization, made an important contribution.

Fears that the US economy would overheat were fanned by the combination of a further tightening labor market and the

procyclical fiscal policy of the US government. President Trump succeeded in getting one of the largest-ever tax cuts for US

business through Congress. Unemployment in the United States has fallen to 4%, and jobs growth is outpacing the

number of people looking for work for the first time since 2000, with the difference in the nature of the demand for and

supply of work becoming increasingly visible. A stronger dollar and lurking uncertainty regarding the implications of a

trade conflict initiated by the White House are, however, reducing the likelihood that the US economy will overheat.

President Trump’s proposed policy of repairing alleged imbalances in external trade relations has now turned into a

conflict in which the trading partners of the United States are turning to direct retaliation. The end does not appear to be

in sight, since trade conflicts normally involve tariff barriers of 30%-50% before a new balance is achieved. Although the

conflict is receiving much publicity, President Trump’s protectionist policy has not as yet affected the continuing positive

sentiment among consumers and producers in the United States. The negative effects of higher trade tariffs would appear

at this stage to be mainly affecting economies that are more dependent on exports, especially the emerging markets. A

long-lasting trade conflict will, however, have repercussions worldwide, ultimately also for the United States. The US

central bank (the Fed) has raised interest rates twice by 0.25% in 2018 and is expected to implement a further two

interest rate hikes during the remainder of the year. Inflation in mid-June stood at 2.9%, which is above the Fed’s

symmetrical inflation target of 2%. The further flattening of the yield curve has fueled the debate about the likelihood of

an approaching recession in the United States. The flatter curve is, however, partly technical in nature, due to the effect of

the unconventional policy of the central bank on the pricing of long-term bonds.

The economic recovery is also continuing in the Eurozone, with growth in the first quarter of 2.5% annualized. The growth

rate, however, eased slightly compared to the second half of 2017, due to a more uncertain geopolitical situation,

political concerns and a slowdown in export growth. The threat of a cabinet crisis in Germany, the election of a

Euroskeptic government in Italy and the increased complexity of the Brexit process were the prominent issues.

Nonetheless, growth in the Eurozone is still robust, driven by rising consumption growth as the negotiating position of

employees is improving due to the tighter labor market. Unemployment in the Eurozone has fallen to 8.4%.

The decline in the volume of world trade is affecting Japan as well as Europe. Although economic growth in Japan at 1.3%

annualized in the first quarter of 2018 is above the long-term trend, there was a visible decline in the contribution of the

export sector to economic growth, while investment actually rose. The largest contributor to global economic growth at

the moment is China. The Chinese economy grew by 6.8% annualized, in line with previous quarters. The leading

indicators, however, suggest a slowdown in economic growth, partly due to action by the Chinese authorities to limit

excessive lending by the banks. We expect the Chinese government to continue to target growth of around 6.5%

annualized and will employ monetary stimulation if there is a visible slowing of economic activity.

Equity markets outlook

After an unusually calm year in the stock markets, equities corrected in early 2018 due to an increased focus on higher

valuations, higher capital market rates and overenthusiastic expectations with respect to economic growth. This was

followed by a recovery on the back of very solid earnings figures for the first quarter of 2018. The return of the MSCI All

Country World Index in euros at the end of June was 2.7%. From a multi-asset perspective, the upside potential for stocks


in the second half of 2018 has decreased but has not disappeared. The market is torn between concerns of an escalation

of the trade war and the continuing rosy picture with respect to earnings. Global equities still offer an attractive return in

historical terms for assuming equity risk in comparison to (government) bonds, but differentiation is becoming more

important now that the global economic expansion is becoming less synchronized. The emerging markets are still the

most exposed to the combination of continued strength of the dollar and a further decline in the volume of world trade.

This could, however, be offset by powerful monetary accommodation in China in the second half of 2018. Equity markets

usually anticipate a recession, but in the short term we do not currently see any reason for a recession in the United States

or the other G7 countries. More far-reaching protectionism, rising geopolitical risk surrounding mid-term elections in the

US and an upward move in capital market rates represent real risks that could slow global growth and subsequently affect

corporate earnings.

Bond markets outlook

Volatility in the bond markets in developed countries remained low. After a strong rise in capital market rates in January,

the US government 10-year yield moved in a range between 2.7% and 3.1%. The differential between the United States

and Europe has, however, widened further: the yield differential between a 10-year US Treasury bond and a 10-year

German Bund is now more than 2.5%, a level last seen in 1989. Looking ahead, this investment category is exposed to

rising expectations of inflation, the withdrawal of the central banks as buyers in the bond market and an overheating of

the economy, but could benefit from an escalation of the trade war between the large economic blocs. The prices of

government bonds have been influenced by the central banks in recent years, as a result of which valuations have moved

further away from the fundamentals, especially in the German government bond market. The transition from quantitative

easing to quantitative tightening that the central banks have initiated could mean a change of perspective for bond

investors.

Emerging markets bonds denominated in local currencies have been seriously hampered by heavy declines in exchange

rates, fears of trade restrictions from the US and local political instability, for example in Turkey. The coupons on these

bonds are attractive, but in view of the proposed interest rate moves by the Fed and the current uncertainty with respect

to rising protectionism, the outlook for this asset class in the second half of 2018 is moderate at best.

Continuing cyclical growth in a so far moderate inflation environment is still favorable for corporate bonds, although we

are already in a late phase of the credit cycle. Powerful earnings growth is maintaining the ability to service interest costs

for now, but business debt is rising further, especially in the United States. Sentiment among corporate bond investors

has also become less positive, due to the continuing high correlation between corporate bond yields and the bond-buying

programs of the central banks, which are due to be settled in the near future. Investors also note that the contract terms

in the less creditworthy segment of the corporate bond market have become less solid, meaning that investors will have

less protection in the event of a default. Valuations in this market have recently become somewhat less favorable, but are

still high from a historical perspective, unlike the valuations of high-rated corporate bonds.

Risk management The presence of risks is inherent to the character of asset management. It is therefore very important to have a

procedure for controlling these risks embedded in the company's day-to-day operations. The manager (RoLux) ensures

that risks are effectively controlled via the three-lines-of-defense model: RoLux management (first line), the Compliance

and Risk Management departments (second line) and the Internal Audit department (third line).

The management of RoLux has primary responsibility for risk management as part of its day-to-day activities. The

Compliance and Risk Management departments develop and maintain policy, methods and systems that enable the

management to fulfill their responsibilities relating to risk. Furthermore, portfolios are monitored by these departments

to ensure that they remain within the investment restrictions under the Terms and Conditions for Management and

Custody and the information memorandum, and to establish whether they comply with the internal guidelines. The

Risk Management Committee decides how the risk-management policies are applied and monitors whether risks

remain within the defined limits. The Group Internal Audit department carries out audits to assess the effectiveness of

internal control.

RoLux uses a risk-management and control framework that helps control all types of risk. Within this framework, risks

are periodically identified and assessed as to their significance and materiality. Internal procedures and measures are

focused on providing a structure to control both financial and operational risks. Management measures are included in

the framework for each risk. Active monitoring is performed to establish the effectiveness of the procedures and

measures of this framework.


Operational risk

Operational risk is the risk of loss as a result of inadequate or failing processes, people or systems. Robeco constantly

seeks opportunities to simplify processes and reduce complexity in order to mitigate operational risks. Automation is a key

resource in this regard and Robeco uses systems that can be seen as the market standard for financial institutions. The

use of automation increases the IT risk. This risk can be divided into three categories. The risk that unauthorized persons

gain access is managed by means of preventive and detective measures to control access to the network and to systems

and data. Processes such as change management and operational management ensure monitoring of a working system

landscape. Lastly, business continuity measures are in place to limit the risk of breakdown as far as possible and to restore

operational effectiveness as soon as possible in the event of disaster. The effectiveness of these measures is tested

regularly both internally and externally. Compliance risk

Compliance risk is the risk of sanctions, financial loss or reputation damage as a result of non-compliance with the laws

and regulations applicable to the activities of Robeco and the funds it manages. Robeco's activities – collective and

individual asset management – are subject to the European and national rules of financial supervision. Observance of

these rules is supervised by the empowered regulators (in Luxembourg the Commission de Surveillance du Secteur

Financier (CSSF) and in the Netherlands the Authority for the Financial Markets, AFM and the Central Bank of the

Netherlands, DNB). It is also in the interest of investors in Robeco-managed funds that Robeco complies with all the

applicable laws and regulations. Robeco has implemented a meticulous process with clear responsibilities in order to

ensure that new laws and regulations are reported and implemented in a timely fashion.

Significant changes in the field of legislation and regulation that could affect the funds managed by Robeco also took

place in 2017. An important example of this is the European directive on markets for financial instruments. This directive,

known as MiFID II, came into effect on 3 January 2018. European distributors of funds managed by Robeco will in

principle no longer be permitted to receive and hold commission as a result of MiFID II. Robeco has defined what it calls a

‘target market’ for each fund and by means of its procedures for development, approval and review ensures that the

funds it manages correspond to the needs, characteristics and objectives of the various target groups concerned.

Moreover, more information will be provided to both retail and institutional clients, for instance on the costs incurred for

the fund and its distribution. Robeco also applies the stricter rules governing best execution for its funds. For each class of

financial instrument, Robeco will thus publish the top five trading places where it executes orders and/or to which it

transmits orders, along with an analysis of the quality of order execution. Robeco has opted to pay the costs of investment

research itself and not to pass these costs on to its clients. The requirements from this directive have been fully

implemented in a timely manner.

Another notable development concerns the introduction of a new European framework for the use of indices as

benchmarks for financial instruments or to measure the performance of investment funds (the Benchmark Regulation). In

line with this regulation that took effect immediately on 1 January 2018, Robeco has formulated solid written plans for

the funds that refer to a benchmark for cases where the content of a benchmark is changed or the benchmark is no longer

offered. Furthermore, in the next update the prospectus will contain clear information stating whether the benchmark is

offered by a registered or authorized manager.

Fund governance Robeco has its own Principles on Fund Governance, available through the website. The objective of these Principles is to

give more detailed guidelines for the organizational structure and working methods of fund managers or independent

investment institutions and to provide guarantees for integrity in the fund's activities and ensure the careful provision of

services. Compliance is the division within Robeco, which continuously monitors actual compliance with the principles.

Once every three years Robeco's Internal Audit department carries out an audit of the fund governance as structured and

implemented at Robeco.

Sustainability investing Integrated approach

Robeco adopts a holistic approach to integrating sustainability into investment decisions. Sustainability is a long-term

driver for change in markets, countries and companies which in turn can impact future performance. From an investment

perspective, we believe the inclusion of material sustainability factors strengthens our investment process and leads to

better-informed investment decisions. The integration of sustainability factors in our investment strategies is well

embedded in the organization. Our portfolio managers and analysts closely cooperate with the engagement specialists

from the Governance and Active Ownership and Sustainability Investing Research team. We base our judgments about


the sustainability of companies and countries in which we invest on a combination of proprietary sustainability research

and research from leading providers including RobecoSAM, Sustainalytics, RepRisk and Glass Lewis. Our research is further

enriched with information we derive from our active conversations with companies and countries about their

sustainability performance.

Stewardship Policy

Carrying out stewardship responsibilities is an integral part of Robeco’s sustainability investing approach. Robeco has a

Stewardship policy in place and is a signatory to different Stewardship Codes including the UK Stewardship Code and the

Japanese Stewardship Code. Robeco’s stewardship activities are executed within our organization; we do not outsource

stewardship activities. Exercising voting rights and engagement are important aspects of our stewardship approach.

Principles for Responsible Investment (PRI)

Robeco’s focus on sustainability investing is underlined by the commitment to the United Nations supported Principles for

Responsible Investment (PRI). Robeco was awarded four years in a row with the highest score of the PRI assessment,

which confirms the companies’ leading position in the field of Sustainability Investing.

Sustainable Development Goals

On 25 September 2015, the United Nations General Assembly formally adopted the universal, integrated and

transformative 2030 Agenda for Sustainable Development, along with a set of 17 Sustainable Development Goals (SDGs).

The SDGs build on the success of the Millennium Development Goals and addresses a range of social needs including

education, health, social protection, and job opportunities, while tackling climate change and environmental protection.

As a signatory of the Dutch SDG Investing Agenda, Robeco is committed to contribute to the SDGs as we consider them as

catalytic drivers for positive change. Furthermore Robeco is involved in various initiatives that investigate how the

investment industry can contribute to the realization of SDGs.

Sustainability investing carried out by funds at Robeco is implemented with minimum restrictions to the investment

universe, and consists of a combination of effective measures:

• Exercising voting rights

• Engagement

• Exclusions

• Integrating ESG factors1 into the investment processes.

French Energy Transition Law

In France a law was introduced to encourage asset owners to integrate climate risk as well as environmental and social

dimensions in their public disclosures. The aim of this law is to channel funds to the Energy Transition and Green Growth.

Robeco offers in its ESG proposition the option to decarbonize portfolios, measure the impact of this decarbonisation and

report on the impact of it, which fully meets the requirements of this law.

Exercising voting rights

Robeco aims to exercise voting rights on shares held by the fund throughout the world. The voting policy of Robeco is

based on the internationally accepted principles of the International Corporate Governance Network (ICGN) and local

codes for corporate governance, such as the Dutch Corporate Governance Code. The ICGN principles and local codes

provide guidelines for shareholders and listed companies on different corporate governance topics, such as the

composition of the board of listed companies, independent supervision of the day-to-day management, an effective

remuneration policy, rights for shareholders and the company's management board. The aim of Robeco's voting policy is

to improve the corporate governance of its investments.

For Fixed income funds, exercising of voting rights is given the type of investments of the fund not applicable.

Engagement

Robeco actively uses its ownership rights to engage with companies on behalf of our clients in a constructive manner. We

believe improvements in sustainable corporate behavior can result in an improved risk return profile of our investments.

Robeco aims to improve a company’s behavior on environmental, social and/or corporate governance (ESG) related

issues with the aim of improving the long term performance of the company and ultimately the quality of investments for

our clients.

1 ESG stands for environmental, social and governance.


Robeco enters into active dialogue with companies about good corporate governance and a socially responsible corporate

policy. In our opinion this will increase shareholder value for the investors in the longer term. We use an integral

approach, which combines the expertise of our investment analysts, our sustainability investing research analysts and our

engagement specialists. By using financially material information as the basis for our talks, we strive to ensure that our

dialogue introduces added value and improves the risk/return profile of the company. This enables us to generate value

for both the investors and the company.

Robeco also engages with companies that breach the UN Global Compact. The UN Global Compact defines several

universal principles with which organizations must comply. These principles are of a general nature and focus on

respecting human rights, good working conditions, combating corruption and exercising due care for the environment. If

a company structurally breaches one or more of these principles, Robeco starts a dialogue with it. If after three years of

dialogue, a company has made insufficient progress in eliminating or mitigating the breach, Robeco can decide to

exclude the company from its investment universe.

Exclusions

Robeco's exclusion policy is based on three main exclusion criteria. Firstly, it excludes companies that are involved in the

production of controversial weapons or essential components for such weapons, or that derive income from the sale or

transport of these weapons. We base our policy of not investing in such companies on a legislative amendment in the

Netherlands governing investments in cluster-munition companies effective since 1 January 2013. Secondly, there is a

policy for excluding countries. Robeco considers any country that systematically violates the human rights of its citizens to

be controversial. These exclusions relate to investment-related sanctions that are imposed by the UN, US or EU. Thirdly, an

unsuccessful dialogue may in time lead to a company's exclusion from the investment universe. In such cases a dialogue

with a company concerns serious and systematic violations of widely accepted international directives on good corporate

governance. Robeco focuses in particular on the United Nations Global Compact. The Executive Committees of RIAM and

RobecoSAM have the final authority to exclude companies and countries.

Integrating ESG factors into the investment processes

Government Bonds:

Sustainability has become a main building block of our sovereign country allocation framework, together with economic

cycle and debt sustainability. The power of country sustainability analyses lies in its capability of identifying potential

issues for countries in an early stage. Our Country Sustainability Ranking creates a systematic framework which is easily

assessable and provides valuable input for our investment decisions.

Credits:

One of the cornerstones of the investment philosophy for our credit portfolios is that avoiding losers is more important

than picking every winner. We believe that integrating sustainability factors into our credit analysis strengthens our ability

to assess the downside risk of our credit investments. Our sustainability analysis is used to focus on the downside risks of

credit investments. Guiding principle for the conclusion on sustainability is that there must be tangible evidence and also a

material impact.

Equities:

Our research shows that companies which score well on the most material environmental, social and governance factors

will ultimately be the winners on the stock market. The way Robeco integrates sustainability information in the

investment process is tailored to the specific characteristics of each investment strategy. Our quantitative equity strategies

use company rankings on ESG scores, which are based on the information gathered through the proprietary

questionnaires from RobecoSAM. Our other equity strategies integrate ESG factors in their fundamental analysis process.

This not only helps to identify potential reputational and financial risk, but also enables us to spot opportunities for

companies that develop solutions to sustainability challenges.


Global Equity sub-funds

Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result

reporting period in %

Investment result 3 years average

Robeco BP Global Premium Equities

B EUR shares 1

162.66 164.84 –0.3 4.5

C EUR shares 1

148.48 150.01 0.0 5.2

D EUR shares

266.14 267.02 –0.3 4.5

F EUR shares

117.21 117.24 0.0 5.2

I EUR shares

157.99 158.01 0.0 5.2

IB EUR shares 2

113.25 111.02 2.0 0.0

M2 EUR shares 3

101.44 102.41 –1.0 1.4

MSCI World Index (Net Return (in EUR)

3.3 6.8

DH EUR shares 3 109.45 113.51 –3.6 6.4

FH EUR shares 3

97.41 100.65 –3.2 –2.6

IH EUR shares 3

110.67 114.39 –3.3 7.3

MSCI World Index (Net Return hedged into EUR)

0.2 10.6

ZB AUD shares 1

145.99 146.53 3.3 9.1

MSCI World Index (Net Return (in AUD)

6.3 9.9

F GBP shares 3

150.23 150.83 –0.4 18.8

I GBP shares 3

150.32 150.89 –0.4 18.8

IB GBP shares 1,3

111.09 112.66 –0.4 7.8

MSCI World Index (Net Return (in GBP)

2.9 20.0

D USD shares

149.68 154.46 –3.1 6.2

D2 USD shares 3

124.27 128.40 –3.2 11.6

E USD shares 1

121.33 127.65 –3.1 6.1

F USD shares

132.83 136.65 –2.8 6.8

I USD shares

133.79 137.61 –2.8 6.9

M USD shares 3

115.14 119.41 –3.6 4.9

Z USD shares 2

96.88 100.00 –3.1

MSCI World Index (Net Return (in USD)

0.4 8.5

DH USD shares 3

120.66 123.32 –2.2 6.6

MSCI World Index (Net Return hedged into USD)

1.7 8.1

Robeco QI Global Conservative Equities

B EUR shares 1

150.04 153.99 –0.6 4.4

C EUR shares 1

133.14 136.30 –0.3 5.0

D EUR shares

194.91 196.05 –0.6 4.4

F EUR shares 3

106.03 106.38 –0.3 3.4

I EUR shares

201.65 202.30 –0.3 5.0

M2 EUR shares 2

99.80 100.00 –0.2

Z EUR shares

195.79 195.81 0.0 5.7

MSCI All Country World Index (Net Return (in EUR)

2.4 6.5

IH EUR shares 3

120.86 123.56 –2.2 8.1

MSCI All Country World Index (Net Return hedged into EUR)

–0.3 15.2

F GBP shares 3

123.82 124.70 –0.7 10.5

MSCI All Country World Index (Net Return (in GBP)

2.0 19.1

D USD shares

149.56 154.72 –3.3 6.1


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



D2 USD shares 2

111.04 112.59 –1.4 0.0

I USD shares

179.80 185.52 –3.1 6.7

Z USD shares

143.63 147.74 –2.8 7.3

MSCI All Country World Index (Net Return (in USD)

–0.4 8.2

Robeco Global Stars Equities

D EUR shares

273.59 271.60 0.7 4.6

F EUR shares

171.17 169.27 1.1 5.4

IL EUR shares 3

125.34 124.16 0.9 11.3

Z EUR shares

220.40 217.26 1.4 6.1


3.3 6.8

Robeco Emerging Stars Equities

D EUR shares

206.72 227.01 –9.0 2.4

DL EUR shares

140.77 154.79 –9.1 2.2

E EUR shares 1

114.05 128.43 –8.8 2.3

F EUR shares

145.89 159.65 –8.7 3.0

FL EUR shares 3

97.11 106.37 –8.7 –2.9

G EUR shares 3

91.75 100.44 –8.7 –8.2

I EUR shares

150.60 164.74 –8.6 3.1

IE EUR shares 2

10,126.01 10,000.00 1.4

Z EUR shares

155.37 169.21 –8.2 4.1

MSCI Emerging Markets Index (Net Return (in EUR)

–4.0 4.0

F GBP shares 3

148.55 163.17 –9.0 20.3

G GBP shares 1,3

152.23 168.79 –9.0 22.5

IL GBP shares 3

144.26 158.56 –9.0 17.4

MSCI Emerging Markets Index (Net Return (in GBP)

–4.4 20.2

D USD shares

114.61 129.04 –11.2 4.1

DL USD shares 3

102.26 115.64 –11.6 2.0

F USD shares 3

139.02 156.47 –11.2 16.8

I USD shares

121.31 136.48 –11.2 4.7

FL USD shares

112.67 126.92 –11.2 4.6

IL USD shares 3

137.66 155.02 –11.2 11.9

KE USD shares 1

97.41 112.61 –11.2 4.6

ML USD shares

122.31 138.49 –11.7 3.3

MSCI Emerging Markets Index (Net Return (in USD)

–6.7 5.6

Robeco Emerging Markets Equities

D EUR shares

182.79 197.53 –7.5 3.4

F EUR shares

141.84 152.75 –7.1 4.2

I EUR shares

334.27 359.83 –7.1 4.3

M EUR shares 133.69 144.84 –7.7 2.9

M2 EUR shares 2 101.31 178.37 1.3


–4.0 4.0

D USD shares

160.50 178.37 –10.0 5.1

F USD shares

123.95 137.29 –9.7 5.8

I USD shares

125.04 138.43 –9.7 5.9


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



IM USD shares 3

99.76 110.55 –9.8 –0.2

J USD shares

128.74 142.54 –9.7 5.9

M USD shares 3

141.26 157.40 –10.3 17.7


–6.7 5.6

Robeco QI Emerging Markets Active Equities

D EUR shares

172.64 180.39 –4.3 4.1

E EUR shares 1

112.12 121.00 –4.4 4.1

F EUR shares

145.77 151.83 –4.0 4.8

G EUR shares 2

90.34 100.00 –9.7 –9.7

I EUR shares

184.49 192.16 –4.0 4.8

Z EUR shares

148.29 153.86 –3.6 5.6


–4.0 4.0

D USD shares

119.08 127.97 –6.9 5.8

D2 USD shares 2

147.90 148.38 –0.3

I USD shares

122.62 131.36 –6.7 6.4


–6.7 5.6

Robeco QI Global Momentum Equities

D EUR shares

145.08 141.02 2.9 7.6

F EUR shares

171.46 166.24 3.1 8.2

I EUR shares

207.28 200.94 3.2 8.2

Z EUR shares

169.32 163.62 3.5 8.9


2.4 6.5

Robeco QI Global Developed Sustainable Enhanced Index Equities

D EUR shares

74.44 72.63 2.5 6.4

F EUR shares

156.29 152.33 2.6 6.6

I EUR shares

159.54 155.36 2.7 6.8

Z EUR shares

169.05 164.31 2.9 7.2


3.3 6.8

IH EUR shares

126.81 127.19 –0.3 7.5

MSCI World Index (Net Return hedged into EUR)

0.2 7.3

I CHF shares 2

106.53 100.00 6.5

MSCI World Index (Net Return (in CHF)

7.0

Robeco QI Emerging Markets Enhanced Index Equities

D EUR shares 3

102.15 106.73 –4.3 2.2

F EUR shares 3

102.54 106.95 –4.1 2.5

Z EUR shares

139.74 145.37 –3.9 5.0


–4.0 4.0

I USD shares

123.50 132.42 –6.7 6.8


–6.7 5.6

Robeco QI Emerging Conservative Equities

B EUR shares 1

107.89 112.29 –1.5 0.9

C EUR shares 1

102.59 106.43 –1.2 1.5


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



D EUR shares

157.32 159.67 –1.5 0.8

F EUR shares

130.82 132.38 –1.2 1.5

I EUR shares

164.57 166.49 –1.2 1.5

IE EUR shares 1

91.89 96.94 –1.2 1.5

Z EUR shares

151.82 153.01 –0.9 2.3


–4.0 4.0

ZB AUD shares 1

135.34 137.59 2.1 5.3

MSCI Emerging Markets Index (Net Return (in AUD)

–1.2 7.0

C GBP shares 3

105.78 107.43 –1.6 5.1

D GBP shares

135.57 138.10 –1.9 8.6

F GBP shares

138.59 140.76 –1.6 9.3

G GBP shares 1

129.16 136.95 –1.6 9.2

I GBP shares

138.42 140.57 –1.6 9.3

MSCI Emerging Markets Index (Net Return (in GBP)

–4.4 11.9

B USD shares 1

90.42 96.78 –4.3 2.4

C USD shares 1

91.58 97.72 –4.0 3.1

D USD shares

116.80 121.93 –4.3 2.4

D2 USD shares 3

119.00 124.38 –4.4 9.2

F USD shares

116.90 121.66 –4.0 3.1

G USD shares 1

110.95 120.28 –4.0 3.0

I USD shares

126.82 131.96 –4.0 3.1

M USD shares

106.58 111.65 –4.6 1.7


–6.7 5.6

Robeco Emerging Markets Smaller Companies Equities

D EUR shares

136.80 145.33 –5.8 0.1

F EUR shares

142.60 150.92 –5.5 1.0

I EUR shares 3

106.52 112.71 –5.5 3.4

MSCI Emerging Markets Mid Cap Index (Net Return (in EUR)

–3.6 2.2

F GBP shares 3

136.06 144.54 –5.9 15.5

MSCI Emerging Markets Mid Cap Index (Net Return (in GBP)

–3.9 18.0

D USD shares

121.79 133.15 –8.5 1.7

I USD shares

128.25 139.57 –8.1 2.6

M USD shares 2

114.23 115.13 –0.8 4.8

Z USD shares

135.42 146.64 –7.6 3.7

MSCI Emerging Markets Mid Cap Index (Net Return (in USD)

–6.2 3.8

Robeco QI Global Value Equities

F EUR shares

165.55 158.33 4.6 7.0

I EUR shares

166.41 158.90 4.7 7.0

Z EUR shares

156.25 148.94 4.9 7.7


2.4 6.5

Robeco QI Global Developed Multi-Factor Equities

B EUR shares 2

131.74 125.24 5.2

D EUR shares 3

128.21 125.25 2.4 9.3

I EUR shares 3

130.11 126.78 2.6 9.9


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result




3.4 0.0

D USD shares 3

132.52 133.14 –0.5 10.6

I USD shares 3

134.48 134.77 –0.2 11.2


0.4 10.9

Robeco QI Global Developed Conservative Equities ex Japan

I JPY shares 3

11,363.63 11,831.91 –4.0 8.4

MSCI Kokusai Index (Net Return (in JPY)

–1.0 13.8

Robeco QI Emerging Markets Sustainable Active Equities

D EUR shares 3

102.47 105.96 –3.1 2.5

F EUR shares 3

102.97 106.21 –2.9 3.0

I EUR shares

133.22 137.37 –3.0 5.3

Z EUR shares 2

93.50 100.00 –6.5


–4.0

I AUD shares 2

92.84 100.00 –7.2

MSCI Emerging Markets Index (Net Return)

–4.8

I USD shares

125.15 132.78 –5.7 7.0


–6.7 5.6

Robeco Emerging Opportunities Equities

D EUR shares

96.54 107.29 –10.0 1.7

F EUR shares

99.32 110.02 –9.7 2.4

I EUR shares

98.96 109.56 –9.6 2.5


–4.0 4.0

I USD shares

105.22 119.80 –12.1 4.1


–6.7 5.6

Robeco QI Global Developed Conservative Equities

B EUR shares 1,3

111.05 113.75 –0.4 6.1

D EUR shares 3

119.79 120.27 –0.4 6.7

I EUR shares 3

119.68 119.84 –0.1 6.7


3.3 9.6

IH EUR shares 2

101.38 100.00 1.4 1.4

MSCI World Index (Net Return (hedged into EUR)

3.5 3.5

B CAD shares 1,3

104.88 105.23 1.7 8.1

MSCI World Index (Net Return (in CAD)

5.4 14.0

I JPY shares 3

12,330.03 12,914.70 –4.5 12.5

MSCI World Index (Net Return (in JPY)

–1.2 20.0

D USD shares 3

121.86 125.83 –3.2 7.3

I USD shares 3

123.70 127.39 –2.9 7.9


0.4 10.9

Robeco QI Global Developed Active Equities

I EUR shares 2

104.21 100.00 4.2


5.2


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



Robeco QI Customized Enhanced Index Equities I

Z USD shares 3

124.80 125.90 –0.9 15.6

80% MSCI World Index (Net Return (in USD), 20% MSCI Emerging Markets Index (Net Return (in USD)

–1.0 15.1

Robeco QI Global Quality Equities

D EUR shares 3

113.04 107.72 4.9 8.2

F EUR shares 3

113.94 108.30 5.1 8.7

I EUR shares 3

113.98 108.33 5.2 8.8


2.4 7.4

I USD shares 3

123.65 120.87 2.2 15.7


–0.4 13.9

Robeco QI Global Sustainable Conservative Equities

D EUR shares 3

106.23 106.90 –0.6 4.0

F EUR shares 3

107.04 107.45 –0.4 4.5

I EUR shares 3

107.11 107.50 –0.4 4.5

Z EUR shares 2

97.96 107.50 –2.0 –2.0


2.4 7.4

I USD shares 3

116.50 120.25 –3.1 11.1


–0.4 13.9

Robeco QI Global Developed Enhanced Index Equities

D EUR shares 3

108.32 105.31 2.9 8.3

F EUR shares 3

108.53 105.39 3.1 8.5

I EUR shares 3

108.61 105.41 3.1 8.6


3.3 8.8

I JPY shares 2

9,868.07 10,000.00 –1.4

MSCI World Index (Net Return (in JPY)

–0.7

D USD shares 3

106.52 106.51 0.1 6.5

F USD shares 3

106.73 106.59 0.2 6.7

I USD shares 3

106.81 106.62 0.3 6.8


0.4 7.0

1 Assuming reinvestment of the distributed dividend. See Notes on page 192.

2 Share class activated/deactivated in reporting period. See table on page 7 to 8.

3 3 year performance since inception/until deactivation.

Performance analysis

Robeco BP Global Premium Equities

Returns realized by the global equity market were muted in the first half of the year and so the sub-fund trailed its index.

With growth stocks outperforming value, the index continued to see strong returns from a variety of high growth,

expensive stocks. Stock selection caused most detraction, with a focus on technology, where the index had a much more

expensive book of constituents. Stock selection was positive in consumer staples, mainly due to food and beverage

holdings. With the technology overweight currently in place, sector allocation added to performance, running well ahead

of the broader market returns.

We will continue to examine various sectors and regions to identify stock-specific opportunities where stock price and fair

value dislocations appear. With respect to sustainability investing, we qualitatively capture a range of ESG issues that

directly and indirectly affect our decision-making during the course of our characteristics-based investment process.


Robeco QI Global Conservative Equities

After an extended period of low market volatility, the equity markets entered choppier waters in 2018, especially in

emerging markets. Worries about trade wars, higher commodity prices, associated inflation fears and high market

valuations led to periods with sharp drawdowns (i.e., early February, late March and June). At the same time, corporate

earnings remained strong, especially in the US, where the recent tax cuts had a positive impact on company profits.

Overall, the global equity markets ended the first half of 2018 positively, especially measured in euros, as the weaker

euro led to higher returns for euro-denominated investors.

Cyclical growth stocks such as tech and consumer discretionary companies continued to outperform defensive and value

stocks. The low-risk and value exposure of the sub-fund therefore caused the strategy to lag the market in the first half of

2018.

Sustainability based on RobecoSAM scores is integrated into the investment policy. The RobecoSAM scores take into

account environmental, social and governance (ESG) factors. The portfolio construction process is highly disciplined and

ensures that the RobecoSAM sustainability score of the portfolio is better than or equal to the overall sustainability score

of the reference index. This means that companies that score well on ESG-related factors have a greater chance of being

included in the portfolio, while those with a low score are more likely to be excluded.

Robeco Global Stars Equities

In the first half of 2018, the portfolio underperformed the index. The main detractors on a sector level were found in the

technology and financials sectors. Strong performance contribution came from the sectors telecommunications,

industrials and consumer staples. Financials started the year strongly as long-term bond yields across the globe continued

their climb. The equity markets overall rose sharply on the back of synchronic global growth expectations. Earnings

numbers came in strong for 2018 as a result. However, the equity markets gave back most of the gains as leading

indicators rolled over. Especially European financials dropped, as non-US growth slowed and political uncertainty returned

to the agenda with the Italian elections and the turmoil in the German parliament. The next development was trade

tension, which can have a negative impact on global economic growth. The growth slow-down outside the US, combined

with these tensions, resulted in a stronger US dollar and weaker emerging markets, where most of the pain in the

portfolio was felt, with Samsung and TSMCRobeco analysts making judgment calls on the materiality of ESG factors based

on their analysis. These factors are assessed per sector and for individual companies.

Robeco Emerging Stars Equities

In the first half of 2018, the emerging equity markets dropped by 4% in euros and underperformed the developed

markets. The sub-fund lagged the MSCI Emerging Markets Index, mainly due to its position in Argentina and negative

stock selection results in Brazil and India. During the period, the sub-fund reduced its positions in India, Russia and

Argentina, entered a new position in Thailand and added to South Africa.

The sub-fund maintained its investment policy, which combines active country allocation, stock selection based on

fundamental research and support from quantitative models, and the inclusion of ESG factors.

Robeco Emerging Markets Equities

During the first half of 2018, the emerging equity markets declined and underperformed the developed equity markets.

The sub-fund underperformed the MSCI Emerging Markets Index.

Stock selection in India, South Korea, Brazil and Taiwan detracted most from performance. Country allocation also

detracted from relative performance, though to a lesser extent. The sub-fund was hurt mainly by its overweight positions

in Argentina, Brazil and Indonesia. Our underweight positions in Turkey, Poland and the Philippines and the overweight

position in Russia contributed positively to relative performance.

In the reporting period, the sub-fund increased its positions in China and Korea and bought new positions in Hungary,

whilst lowering its positions in India and Malaysia. For Robeco Emerging Markets Equities, ESG factors are incorporated

into the investment and decision-making process. A proprietary bi-annual corporate governance questionnaire is an

integral part of the fundamental framework. The team assesses shareholder, board, management, government and

environmental factors.

Relevant ESG issues are discussed with the management of companies on a case-by-case basis. Input from RobecoSAM

sustainability investing analysts is used to further enhance ESG integration into the investment process.

Robeco QI Emerging Markets Active Equities

The investment objective is to outperform the index using a quantitative stock selection model.

In the period under review, the sub-fund showed positive relative performance. The Value and Momentum factors

contributed negatively. The Quality and Analyst Revisions factors contributed positively.


Sustainability is integrated into the investment policy. The portfolio construction process is highly disciplined and ensures

that the overall sustainability score of the portfolio, based on RobecoSAM ESG scores, is better than the sustainability

score of the index.

Robeco QI Global Momentum Equities

The investment objective of the sub-fund is to outperform the index using a quantitative stock selection model. The model

indentifies broad groups of stocks that have positive momentum characteristics, while at the same time taking valuation,

quality and low-risk characteristics into account. The sub-fund managed to outperform the index in a rising market. While

the Momentum factor contributed most to the performance of the sub-fund, controlling for valuation and quality also

contributed positively, whereas the contribution from low-risk was negative.

Sustainability, based on RobecoSAM scores, is integrated into the investment policy. These RobecoSAM scores take into

account environmental, social and governance factors. The portfolio construction process is highly disciplined and ensures

that the overall sustainability score of the portfolio is better than or equal to the overall sustainability score of the index.

Robeco QI Global Developed Sustainable Enhanced Index Equities

The investment objective of the sub-fund is to provide an improved sustainability and return profile.

In the period under review, the sub-fund showed negative relative performance. The sustainability factor contributed

negatively and the quantitative factors contributed positively to performance.

The strategy takes a broad perspective on sustainability. To avoid investing in harmful practices, companies can be

excluded. The footprint for water use, greenhouse gas emissions, waste and energy use is aimed to be at least 20% lower

than the index.

Robeco QI Emerging Markets Enhanced Index Equities


In the period under review, the sub-fund performed in line with the index. The Value and Momentum factors contributed

negatively. The Quality and Analyst Revisions factors contributed positively.



score of the index.

Robeco QI Emerging Conservative Equities

After a good 2017 for emerging market equities, the first half of 2018 was quite challenging. The impressive rise of the

large Chinese tech giants, with substantial weight in the MSCI EM Index, halted. Markets such as Turkey and Brazil

suffered under political and economic uncertainty. Moreover, currency weakness caused negative returns for global

investors in emerging market equities.

In terms of currencies, both the Brazilian real and Turkish lira lost around 14% versus the US dollar, leading to an all-time

low for the closely followed EM currency index. As uncertainties increased and investors returned to more defensive and

value stocks, the Low-Risk and Value factors led to a better return for the strategy than the market cap index. This in stark

contrast to our developed market strategies, where sentiment was observed to be much more positive. The strategy

therefore performed according to expectations, achieving risk reduction in volatile and falling markets.



that the RobecoSAM sustainability score of the portfolio is better than or equal to the overall sustainability score of the

reference index. This means that companies that score well on ESG-related factors have a greater chance of being


Robeco Emerging Markets Smaller Companies Equities

In the first half of 2018, the index dropped by 3.5% in euros and underperformed the developed markets. The sub-fund

lagged the MSCI EM Midcap Index mainly due to positions in Argentina and India. Stock selection was particularly

negative in China, Korea and Russia. During the period, the sub-fund reduced its positions in Russia and Thailand. The

position in Brazil was increased.


fundamental research with support from quantitative models and includes ESG factors.

Robeco QI Global Value Equities

The investment objective of the sub-fund is to outperform the index, powered by a quantitative stock selection model. The

model indentifies broad groups of stocks that have positive value characteristics, while at the same time taking


momentum, quality and low-risk characteristics into account. The sub-fund outperformed the index in a rising market.

While the Value factor contributed most to the performance of the sub-fund, controlling for Momentum and Quality also

contributed positively, whereas the contribution from Low Risk was negative.




Robeco QI Global Developed Multi-Factor Equities


strategy allocates to subsets of companies that have positive value, momentum, quality and low-risk characteristics. The

sub-fund underperformed the index In a rising market. The performance of low-risk stocks was the main negative

contributor to performance. The performance contribution of momentum was also negative, value was flat, and quality

had a positive contribution.




Robeco QI Global Developed Conservative Equities ex Japan

After an extended period of low market volatility, the equity markets entered choppier waters in 2018, especially in the

emerging markets. Worries about trade wars, higher commodity prices, the associated inflation fears and high market

valuations led to periods with sharp drawdowns (i.e., in early February, late March and June). At the same time, corporate

earnings remained strong, especially in the US, as the recent tax cuts had a positive impact on company profits.

Overall, the global equity markets ended the first half of 2018 positively, especially when measured in euros, as the

weaker euro led to higher returns for euro-denominated investors.



2018.






Robeco QI Emerging Markets Sustainable Active Equities


In the period under review, the sub-fund showed negative relative performance. The Momentum factor contributed

negatively. The Value, Quality and Analyst Revisions factors contributed positively.

The RobecoSAM ESG score of the portfolio is aimed to be 20% better than the index. The footprint for water use,

greenhouse gas emissions, waste and energy use is aimed to be at least 20% lower than the index.

Robeco Emerging Opportunities Equities

In the first half of 2018, the emerging equity markets dropped 4% in euros and underperformed the developed markets.

The sub-fund lagged the MSCI Emerging Markets Index mainly due to its position in Argentina and negative stock

selection results in Brazil and India. During the period, the sub-fund reduced its positions in India and Russia, took a new

position in Thailand and added to South Africa and Indonesia.


fundamental research with support from quantitative models and includes ESG factors.

Robeco QI Global Developed Conservative Equities










2018.






Robeco QI Global Developed Active Equities

This sub-fund was launched in March 2018. The investment objective is to consistently achieve a better return than the

index by taking well-diversified exposure to an integrated multi-factor stock selection model consisting of proven return

factors such as Value, Quality and Momentum.



score of the index.

Robeco QI Customized Enhanced Index Equities I


In the period under review, the sub-fund showed positive relative performance. The Value factor contributed negatively.

The Quality, Momentum and Analyst Revisions factors contributed positively.



score of the index.

Robeco QI Global Quality Equities


model indentifies broad groups of stocks that have positive quality characteristics, while at the same time taking valuation

and momentum characteristics into account. The sub-fund outperformed the index in a rising market. The Quality factor

contributed positively to performance. While controlling for Value made a negative contribution, controlling for

Momentum made a positive contribution to the performance of the sub-fund.




Robeco QI Global Sustainable Conservative Equities









2018.






Robeco QI Global Developed Enhanced Index Equities


In the period under review, the sub-fund performed in line with the index. The Value factor contributed negatively. The

Quality, Momentum and Analyst Revisions factors contributed positively.



score of the index.


Regional & Country Equity sub-funds

Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



Robeco Asia-Pacific Equities

D EUR shares

161.56 165.55 –2.4 3.5

F EUR shares

173.63 177.26 –2.0 4.3

I EUR shares

3 117.16 119.59 –2.0 9.4

Z EUR shares

192.73 195.87 –1.6 5.2

MSCI All Country Asia Pacific (Net Return (in EUR)

–0.6 5.2

D USD shares

190.51 200.78 –5.1 5.1

F USD shares

3 135.60 142.37 –4.8 11.3

I USD shares

152.84 160.46 –4.7 5.9

IM USD shares

2 111.95 109.81 1.9

M USD shares

126.77 133.93 –5.4 4.6

MSCI All Country Asia Pacific (Net Return (in USD)

–3.4 6.8

RobecoSAM Sustainable European Equities

D EUR shares

54.97 54.42 1.0 3.6

E EUR shares

1 114.72 116.82 1.0 3.6

F EUR shares

149.26 147.33 1.3 4.3

G EUR shares

3 100.60 99.31 1.3 0.6

I EUR shares

209.21 206.49 1.3 4.3

IE EUR shares

2 9,926.08 10,000.00 –0.7 –0.7

Z EUR shares

3 103.86 102.12 1.7 3.9

MSCI Europe Index (Net Return (in EUR)

–0.5 2.6

I USD shares

3 100.10 101.61 –1.5 0.1

MSCI Europe Index (Net Return (in USD)

–3.2 –1.7

Robeco QI European Conservative Equities

B EUR shares

1 105.25 108.29 –0.8 2.5

C EUR shares

1 135.58 139.15 –0.6 3.0

D EUR shares

179.59 181.11 –0.8 2.5

F EUR shares

3 116.71 117.41 –0.6 6.5

I EUR shares

171.52 172.52 –0.6 3.1

M2 EUR shares

2 99.84 100.00 –0.2

Z EUR shares

190.15 190.66 –0.3 3.7

MSCI Europe Index (Net Return (in EUR)

–0.5 2.6

IH EUR shares

179.11 180.04 –0.5 6.2

MSCI Europe Index (Net Return hedged into EUR)

–0.6 5.5

C GBP shares

1,3 119.40 123.03 –1.0 10.8

MSCI Europe Index (Net Return (in GBP)

–0.8 12.7

B USD shares

1 91.92 97.26 –3.6 4.1

D USD shares

134.61 139.61 –3.6 4.1

D2 USD shares

3 114.60 119.15 –3.8 7.1

F USD shares

3 98.65 102.07 –3.4 –1.3

IM USD shares

3 100.90 104.50 –3.5 0.9


Investment results

Note Price in

currency x 1 30/06/2018

Price in

currency x 1 31/12/2017

Investment result



M USD shares

114.13 118.64 –3.8 3.6

MSCI Europe Index (Net Return (in USD)

–3.2 4.2

D2H USD shares

3 115.46 115.40 0.1 7.5

DH USD shares

116.68 116.28 0.3 7.3

IH USD shares

117.58 117.01 0.5 7.8

MH USD shares

115.14 114.68 0.4 6.8

MSCI Europe Index (Net Return hedged into USD)

0.7 6.8

Robeco QI US Conservative Equities

D EUR shares

163.56 162.91 0.4 6.9

I EUR shares

167.28 166.24 0.6 7.5

MSCI North America (Net Return (in EUR)

5.2 9.0

IH EUR shares

3 116.51 119.77 –2.7 7.5

MSCI North America (Net Return hedged into EUR)

1.4 13.6

F GBP shares

3 130.97 130.66 0.2 13.4

MSCI North America (Net Return (in GBP)

4.8 20.2

D USD shares

3 113.73 116.54 –2.4 6.7

G USD shares

1 117.83 124.27 –2.2 9.1

I USD shares

3 121.29 123.97 –2.2 9.5

M2 USD shares

2 100.74 100.00 0.7

MSCI North America (Net Return (in USD)

2.3 10.7

DH USD shares

2 115.88 116.03 –0.1

MH USD shares

2 113.15 113.91 –0.7

MSCI North America (Net Return hedged into USD)

1.9

Robeco BP US Premium Equities

D EUR shares

373.10 366.93 1.7

Documents

Robeco Capital Growth Funds - Argenta€¦ · J.P. Morgan, with its global network, will provide operations activities to Robeco in multiple locations and time zones. This will enable