Robeco Sustainable Property Equities F EUR
Index: Property Equities S&P Developed Property Index
B - EUR
C - EUR
I - GBP
IE - EUR
M - USD
Invests in the property sector
Selects companies with the best earnings potential
Risk limitation through global diversification
Robeco Sustainable Property Equities is an actively managed fund that invests in stocks in developed countries across the world. The selection of these stocks is based on fundamental analysis. This fund identifies strong global property trends first. Within these trends the fund aims to select the property companies with the best prospects. Carefully developed models are used to select stocks with good earnings prospects and a reasonable valuation. Discussions with management and business-data analyses are then carried out in order to stringently screen the individual companies. Voting, Engagement, ESG Integration and Robeco's exclusion policy are part of the investment policy.
Based on transaction prices, the fund's return was 5.30%. Both the Robeco Sustainable Property Equities fund as well as its benchmark had their best performance year since the fund's inception 23 years ago. The real estate sector outperformed general equities in 2021. In December, the PropTech and Lifestyle trends performed better than the Prime Office and Prime Retail trends. The spread of the Omicron variant clearly impacted sentiment and the knee-jerk reaction of investors was to rotate out of Office and Retail-exposed stocks. Stock selection was positive. Within the Prime Office trend, portfolio holding Tokyu Fudosan performed well on news that the company sold a non-core asset, while Japanese office names in general performed poorly in the month. The positive stock selection within Prime Retail was driven by Federal Realty and Kimco Realty, two US shopping center owners, which benefit materially from the reopening of the US economy. Finally, within the PropTech trend the data center stocks underperformed, but that was more than compensated for by the outperformance of the portfolio holdings with exposure to logistic, life science or telco tower assets.
The strong performance in December masked underlying volatility during the month and across regions. The spread of the Omicron variant negatively impacted sentiment in the first half of December in Europe and Asia. The US seemed isolated from this negative sentiment. The final weeks of 2021 were strong across the board, following preliminary indications that Omicron results in less severe illness. 2021 was a remarkable year. From the moment the news about the Phase 3 trial effectiveness of the Pfizer/BioNTech mRNA-based vaccine broke on 9 November 2020, equity markets marched higher. There was some volatility in 2021 as a result of the spread of the Delta and recently Omicron variants, but in general the markets did not look back and just marched on. General equities and the property sector reached all-time highs in December 2021.
The fund can engage in currency hedging transactions.
The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.
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.
Robeco Sustainable Property Equities is an actively managed fund investing in equities from developed countries around the world. The selection of these stocks is based on a fundamental analysis. The fund's objective is to achieve a better return than the index. The fund aims for a better sustainability profile compared to the Benchmark by promoting certain ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, while avoiding investment in thermal coal, weapons, military contracting and companies that severely violate labor conditions, next to proxy voting and engagement. The fund also aims for an improved environmental footprint compared to the Benchmark.This fund is the first to identify strong global trends in the real estate sector. Within these trends, this fund focuses on companies with the best prospects in the sector. The fund managers use carefully developed models to choose stocks with good earnings expectations and reasonable valuation. The fund aims at selecting stocks with relatively low environmental footprints compared to stocks with high environmental footprints. The investment policy is not constrained by a benchmark but the fund may use a benchmark for comparison purposes. The majority of stocks selected will be components of the Benchmark, but stocks outside the Benchmark may be selected too. The fund can deviate substantially from the issuer, country and sector weightings of the Benchmark. There are no restrictions on the deviation from the Benchmark. The Benchmark is a broad market weighted index that is not consistent with the ESG characteristics promoted by the fund.
Exclusions+
Better than index 20% better than index
Eurosif
Expectation of fund manager
Commercial real estate fundamentals are strong going into 2022. Developed markets' economies recovered strongly in 2021 and are expected to grow above trend in 2022 as well. Employment growth is strong and labor markets are tight. Historically, employment growth has been a key demand driver of real estate space. With financing costs close to all-time lows and a reopening of our society underway, fundamentals are supportive of property stocks. Its attractive yield is even more valuable due to the sector's natural inflation-hedging attributes. Looking at longer-term periods in history, we find that the sector has generated attractive returns versus general equities. Ownership of property assets offers an attractive income stream and the opportunity to benefit from land value appreciation.
Folmer Pietersma, Frank Onstwedder
Mr. Folmer Pietersma, CeFA, is Portfolio Manager with Robeco and member of the Property Team. Prior to joining Robeco in 2007, Folmer worked at ABN AMRO Asset Management as a financial analyst and started his career in 1998 as a sell side trader at ABN AMRO's wholesale division. Folmer holds a master's degree in Economics from the University of Tilburg. In 2001 he obtained his Master of Financial Analysis' degree (Vrije Universiteit Amsterdam) and his CEFA registration. Mr. Frank Onstwedder is a member of the Property team. Together with portfolio manager Folmer Pietersma he is the portfolio manager of Robeco Property Equities. Frank worked at NN Investment Partners in The Hague, where he has been head of financials in the global equity research department since 2009. Before that, he was a real estate equities senior portfolio manager at Lehman Brothers Asset Management in Amsterdam. Between 2000 and 2007 he worked at Robeco, where his positions included head of the Pacific team and portfolio manager of the property fund. Between 1998 and 1999 he was an equities portfolio manager at Aegon Investment Management in The Hague. Frank started his career in 1994 as an equities portfolio manager at Robeco. He holds a Master's degree in Econometrics from the Erasmus University Rotterdam.
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