Spotlight on china

In this issue

CHINA GOES FOR ‘GENTLY DOES IT’ Page 5 SOME ARE MORE EQUAL THAN OTHERS

Page 6 CHINA’S MOUTH-WATERING INVESTMENT OPPORTUNITIES

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SPOTLIGHT ON CHINA A collection of articles to commemorate Robeco’s sponsorship of the Volvo Ocean Race JAN/FEB 2015

CONTENTS 3 Foreword 5 China goes for ‘gently does it’ 6 Some are more equal than others 8 Riding the Chinese e-commerce boom 10 Navigating your way out of trouble

12 China’s mouth-watering investment opportunities 14 Facts and figures

15 Fresh opportunities in Asia 16 Contact

For professional investors 4-11 October

Alicante

14-15 March

Auckland

14-17 June

Lorient

15-19 November

Cape Town

18-19 April

Itajaí

19 June

The Hague (Pit Stop)

2-3 January

Abu Dhabi

16-17 May

Newport

27 June

Gothenburg

6-7 June

Lisbon

7-8 February Sanya 2|

FOREWORD There’s an old saying about ‘taking a slow boat to China’ – and that’s about as far removed as you can get for the Volvo Ocean Race. After a voyage of more than 20,000 km, competition in the ‘Formula One’ of ocean racing is now seriously heating up as the boats reach the Chinese port of Sanya.

The leg was one of the most difficult in the ninemonth race as it meant navigating busy shipping lanes and treacherous currents on the way from the last stopover port of Abu Dhabi. The dangers of the race cannot be underestimated after one boat hit a reef during the second leg, temporarily reducing the race field to six.

To commemorate the Sanya stopover, we are pleased to publish our fourth magazine, focusing on China as well as some stories directly from our sponsored boat, Team Brunel. In this edition, we feature a double interview with Pim van Vliet, portfolio manager for Robeco Conservative Equities, and Bouwe Bekking, Team Brunel’s skipper.

Investors target the same markets, and the race boats are identical – so how do both men go the extra nautical mile to beat competitors?

China is itself steadily winning the global economic race. Robeco’s Chief Economist Léon Cornelissen gives his view on Chinese growth potential, while

Victoria Mio, portfolio manager of the Chinese Equities fund, reveals how e-commerce lies at the heart of the country’s new-found consumerism.

Some of this growth however has come at a price to the environment, particularly in resource management. Dieter Küffer of RobecoSAM explains how China is seriously working on improving its water resources and how investors can benefit from the opportunities this presents.

And what are the best picks in 2015 for the wider Asian region? Arnout van Rijn, Chief Investment Officer of Robeco Asia Pacific, outlines his three favorite equity markets.

Finally, in our latest race report, Team Brunel navigator Andrew Cape discusses how he planned to tackle the tricky third leg, using a combination of advanced technology and pure gut instinct.

We hope you enjoy our magazine and will continue to follow the race with us.

Tony Edwards Chief Executive Officer Robeco Asia Pacific

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CHINA GOES FOR ‘GENTLY DOES IT’ Léon Cornelissen Chinese economic reforms continue, but the authorities are going about it carefully.

After all, they don’t want to risk missing their growth targets. Oil price declines and the US growth recovery are providing some welcome wind in China’s wings.

The Chinese economy is struggling with headwinds.

In 2014, third-quarter growth was the lowest in five and a half years and there is a big chance that the growth target of 7.5% will be missed. This growth deceleration is partly related to the curbs in credit lending, a measure the authorities adopted to prevent the real estate market from overheating.

Measures taken to reduce pollution also had a negative impact in growth.

Welcome support from low oil prices And yet Robeco’s chief economist Léon Cornelissen is not somber about the growth outlook for this year: “The Chinese authorities will probably go for a growth target of 7% this year, but they will not accept a lower growth number as this would have a serious effect on employment. And 7% is doable.”

According to Cornelissen, the lower oil prices will quickly drive inflation lower in China, which in turn creates more room for stimulus through interest rates. That China wants to reduce its major dependence on foreign oil supplies is not an issue at this point: “Low oil prices are very favorable for China. The country has major coal reserves, but in

terms of CO2 emissions, that is not handy, and at this price oil is irresistible.”

The reforms the authorities are currently implementing are in Cornelissen’s opinion not a major threat to growth. “In the past, there was a tendency to push regional leaders to maximize economic growth. But now the focus is on budgetary discipline, too. However, if this is excessively stringent, it puts a brake on growth, though the effects are not so dramatic in practice.

Further, they are compensating this with monetary stimulus measures or letting the yuan weaken faster versus the dollar.”

This method of sliding exchange with the dollar is not a pertinent issue at the moment. However,

the central government has pumped capital into the banks and invested further in infrastructure projects. What’s more, the continuing recovery in the US economy is having a positive effect on growth in China.

‘The condition the authorities place on the reforms is that growth does not come under too much pressure’

Weak domestic spending Cornelissen is a little less positive though for the longer term. “Private sector debt and debt at lower levels of government are not likely to put any pressure on growth this year. But debt problems are increasing and that is unfavorable for the longer term.”

‘The condition the authorities place on the reforms is that growth does not come under too much pressure’

Another problem is domestic spending: “This is weak because the Chinese are keen savers due to inadequate social provisions”, according to Cornelissen. “It would be better – for the global economy, too – if there was a greater focus on this issue.” The transition the government is pursuing from an export-led economy to a consumptiondriven economy could do with changing up a gear or two, says the economist.

“It is under way, but they’re opting for a ‘gently does it’ approach. The condition the authorities place on the reforms is that growth does not come under too much pressure, as that would threaten social and political stability.”

This publication is intended to provide investors with general information on Robeco’s specific capabilities, but does not constitute a recommendation or an advice to buy or sell certain securities or investment products.

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SOME ARE MORE EQUAL THAN OTHERS Pim van Vliet and Bouwe Bekking Investment funds target the same markets, and the Volvo Ocean Race teams are competing with identical boats. So if all things are equal, how do Robeco’s fund managers and Team Brunel generate a winning performance?

Quantitative techniques pioneered by Robeco since the 1990s aim to get more performance out of the same markets than the competition. And Team Brunel likewise relies on the skills of its highly experienced sailors to get more speed out of the same boat as its rivals.

The rewards are plain to see: Robeco Conservative Equities strategy have achieved success over the past eight years by moving away from the crowd, while Team Brunel likewise increases its chances of winning by outsmarting the other boats. The team currently heads the race leaderboard after winning the second leg.

Aiming high by looking low The Robeco Conservative Equities strategy does this by exploiting an anomaly in the equity market where low-volatility stocks have been shown to generate better performance at lower levels of risk.

Pim van Vliet

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“In 2006 Robeco was one of the first asset managers to adopt low-volatility equity investing,” says Pim van Vliet, portfolio manager of the strategy. “Low-volatility investing is slowly gaining

more traction and investors worldwide are gradually increasing their allocations.”

“Our approach differs in many ways, because we add elements to decrease risk or enhance return,” he says. “We select stocks on the basis of volatility, beta, low default risk and value- and momentumdriven factors. So we consider not only historical volatility, but also include other factors to enhance returns and avoid unnecessary risks and costs.

We use the term ‘Conservative’ instead of ‘low volatility’ because this is not a generic low-volatility or minimum variance investment strategy.”

For Team Brunel skipper Bouwe Bekking, using specialist skills to gain an advantage works the same way when racing around the world. “The boats are identical, so several factors are involved in whether you win or lose,” he says. “We had a good training program, but most importantly we have a fantastic team who never ever give up. They are fighting and believing in themselves until the end.”

“The factors that make all the difference in winning using identical boats are preparation, the actual

execution of the game plan according to the weather, the tactics when the weather changes, and how well the team is functioning and sailing as a whole.”

Survival of the fittest Bekking’s crew is one of the most experienced, and one of the most international: the Dutch captain is competing in his seventh Volvo Ocean Race while Australian navigator Andrew Cape is on his sixth.

“You need a highly experienced crew, otherwise you don’t stand a chance,” says Bekking. “You have to be physically fit, or you will not get around the world in a Formula 1 sailboat. Of course a 25-yearold guy who is half my age is potentially fitter than me, but then for my age I am super fit. I work hard on that, such as daily training during stopovers, no alcohol and eating only healthy food.” (Cape admits to having the occasional drink and smoke!)

Maximizing the winning margin while reducing risk is a strategy used by both Robeco and Team Brunel.

“In order to enhance the risk-return-profile, Robeco Conservative Equities strategy applies its philosophy

‘You need a highly experienced crew, otherwise you don’t stand a chance’

of not going against other factors such as momentum and value when selecting low-volatility stocks,” says Van Vliet. “Thorough empirical research shows the benefits of this approach in generating higher risk-adjusted returns.”

“When we first started, the challenge was how to convert the low-volatility factor, or anomaly, into an efficient portfolio,” he says. “Because in the end, not all low-volatility stocks perform the same, so we want to select the most attractive ones.”

look at more than backward-looking statistical risk measures,” he says. “The negative impact of leverage is picked up by distress risk factors but not by volatility or beta. The main result of taking distress factors into account is smaller drawdowns compared to a generic low-volatility strategy.”

Making the most of momentum

And teamwork is key. Bekking, for example, is not impressed by the fact that some of his competitors – notably Abu Dhabi Ocean Racing captain Ian Walker, who won the first leg – have won medals at the Olympics. In fact, he thinks it may even negatively impact them.

“Adding price momentum helps to improve ‘up-capture’, the percentage of market gains captured by a manager, he says. “Why should you hold a stock that is gradually going down – one that has low volatility but negative momentum in an up market?” And adding valuation factors mitigates valuation risk: “We consider it to be risky to ignore the price you actually pay for a stock.”

“Of course they have performed under a lot of pressure, but only by themselves or with one other person on Olympic boats,” he says. “I actually think it is a minus, as these Olympic sailors are very often individuals used to putting themselves at the forefront, instead of making sure that the team is the most important thing.”

Another thing that Van Vliet wants to avoid is distress risk – when a company has difficulty paying off its financial obligations to its creditors. “We

So what about the boat itself? The Volvo Ocean 65 is technologically more advanced but much slower than the predecessor, the Volvo Open 70, in which

Bekking set an English Channel speed record some years ago.

“I never had any expectations for the new boat, and I told my team the same,” he says. “The boat is what it is and we have to make the best out of it. It is smaller, slower, and heels more than the VO 70, but it is much dryer. And it does have the ability to break records when the conditions are right.”

This publication is intended to provide investors with general information on Robeco’s specific capabilities, but does not constitute a recommendation or an advice to buy or sell certain securities or investment products.

Bouwe Bekking

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RIDING THE CHINESE E-COMMERCE BOOM Victoria Mio China’s rapid growth is now being fueled by e-commerce as the country becomes more consumerist, says Chinese Equities portfolio manager Victoria Mio. And that means investors should target those internet or consumer-orientated companies whose profile was recently massively raised by the flotation of industry titan Alibaba, she says.

China has a clear strategy to move away from its export-led economy, where growth is now unsustainable, to one more focused on the vast internal market for consumer products and services.

And there is certainly plenty of growth potential.

China’s real consumption in 2013 was 36% of total GDP at USD 3.4 trillion – significantly lower than that of other developed countries. As China becomes more of a consumption-driven economy, consumption share is expected to make up a larger percentage of GDP, which in turn will benefit the e-commerce industry.

World leader in online “China’s consumption engine has turned to online,” says Mio. “China now accounts for about 35% of all global e-commerce sales, which makes it the world leader. This is expected to become half of the global market by 2018.”

“These are huge numbers. Initially, China’s consumption story was negatively impacted by the lack of a social security safety net, the lack of a physical infrastructure, and regional imbalances.

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But in the last few years there has been a digital revolution thanks to the advance of smartphones and the penetration of internet services in China.”

“Many of the sectors have now embraced the internet. China now has the largest internet market in the world with 618 million users in 2013 and the penetration rate is 46% of the population. Thanks to this, e-commerce can expand very rapidly.”

China is skipping years of business evolution by embracing e-commerce without first having had traditional ‘high streets’, in the same way that many emerging countries have completely skipped the era of fixed line telephone.

Mio says the lack of physical shopping facilities within China – despite some recent headlinegrabbing developments – has facilitated online. The world’s largest shopping mall recently opened in Tianjin, but you would need to live in the city to be able to take advantage of it.

“In terms of shopping space, China as a whole has retail space per capita of about 0.6 square meters,

which is much lower than the US, which has 2.6 square meters,” Mio says. “A major reason why e-commerce has developed so quickly in China is the inadequate offline retail market. When consumers want to buy things, they have no better choice than to go online.”

Alibaba as the role model The growth of e-commerce can be seen in the astonishing valuation of Alibaba, an e-commerce platform that operates a customer-to-customer (C2C) market that is similar to eBay. Alibaba’s flotation in September 2014 instantly made it worth more than both eBay and Amazon and turned founder Jack Ma – who was already the richest man in China – into a multi-billionaire. In January 2015, the company was worth USD250 billion.

“Jack Ma said: ‘In the US, e-commerce is just online shopping. In China, e-commerce is a lifestyle’,” says Mio, whose portfolio includes Alibaba shares. “Most of the Chinese e-commerce market is internal; Alibaba’s international sales only account for 10% of its revenues - 90% are in the domestic market.”

Part of the growth has been due to China’s 12th

5-year plan which aims to steer the country away from exports towards domestic consumption. To do this, the country has engaged in a massive infrastructure drive.

“The government has helped to construct 200 logistics parks in major economic zones and has made investments in highways, railways, waterways, as a key initiative to improve the infrastructure to support the growth in domestic consumption and commerce,” says Mio. “The national postal system was not big enough to support the growth in e-commerce, so companies have built their own logistics networks. There are now many third party logistics suppliers. Alibaba totally outsourced the logistics to a network of companies, and also has a subsidiary that owns warehouses and last-mile delivery companies.”

Western model for services She says e-commerce is not the only major growth area as the country restructures towards a more Western model. “Another thing that is exciting in China is the growth of services such as

‘As consumers get enough handbags and shoes, they will buy services – that’s the next mega trend’

tourism, financial services, entertainment, and personal services such as massages,” says Mio. “As consumers get enough handbags and shoes and so on, they are going out to buy services – that’s the next mega trend.”

sustainable, and the fact that valuations in Chinese stocks are quite low. Chinese domestic A-shares staged a spectacular rally of 53% last year, but Chinese offshore stocks have some catching up to do. I’m really quite enthusiastic about the Chinese market.”

So how can investors benefit? Mio’s strategy is to buy Chinese stocks that are best placed to take advantage of the growth story fueled by e-commerce or more traditional industries like autos. The sector may also insulate investors against any potential slowdown in the rest of Chinese GDP. “Logistics, e-commerce, internet and tourism companies, along with mass market consumer products like sportswear and alcohol are the best investments,” she says. “Despite some restrictions on car ownership, the auto market is still growing at the high end for SUVs and foreign brands such as BMW.” “We have a positive outlook for Chinese equities in 2015 because of two things: continued reforms in major economic sectors to make growth more

This publication is intended to provide investors with general information on Robeco’s specific capabilities, but does not constitute a recommendation or an advice to buy or sell certain securities or investment products.

Victoria Mio

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‘To avoid collisions, we use radar, the Automatic Identification System and charts. But the eyes of the crew are the number one means of keeping a lookout’

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NAVIGATING YOUR WAY OUT OF TROUBLE Andrew Cape The third leg from Abu Dhabi to Sanya in southern China is one of the most difficult to navigate as it passes through some of the world’s busiest shipping lanes. But for experienced Team Brunel navigator Andrew Cape, it’s just another day at the office.

The dangers of collisions were made all too real during the second leg, when Team Vestas Wind hit a reef in the Indian Ocean and capsized. Watching out for reefs, or other boats, involves a mixture of technology and good old-fashioned instinct.

“We will encounter narrow waters, sandbanks, islands, fishing nets, sea ships and a lot of fishing boats during the voyage to Sanya … so the plan is not to hit them,” laughs the genial Australian, who is competing in his sixth Volvo Ocean Race.

“To avoid collisions, we use radar, the Automatic Identification System and charts, but the eyes of the crew are the number one means of keeping a lookout.”

There’s no brakes The dangers of the Volvo Ocean Race were laid bare during the second leg when Team Vestas Wind collided with a hidden reef in the Indian Ocean in the middle of the night. The crew was safely rescued but the boat was written off.

Volvo Ocean Race competitors are at a

disadvantage to other boats in busy seas because they only have wind power – with no brakes. While a powered boat could maneuver its way out of a collision by simply turning up the throttle and steering clear, sailing boats can only use their skill and ingenuity.

“It can be difficult encountering a fishing boat that is in the way because trying to talk to a Vietnamese fisherman with a radio he doesn’t have in a language he doesn’t understand is pretty pointless,” says Cape. “So we just steer clear of them.”

Aside from other boats and reefs, the competitors also needed to avoid maritime exclusion zones off the coasts of trouble spots such as Iran while finding their way to Sanya. But the biggest problem of all is looking for the one thing they need to encounter – the best winds.

Bekking out of bed to order a change in course to take advantage of it. The tactical maneuver proved critical in overtaking the Dongfeng race team and winning the leg.

“The night before the finish, the distance between us was 1.5 nautical miles, and we had fought back to a distance of 0.7 nautical miles,” recalls Cape.

“Nobody slept, it was a drag race. Suddenly the wind shifted slightly, and this meant we could sail the last miles with a bit more speed and pass Dongfeng. But we did it together as a team.”

experience and a certain level of confidence definitely helps.”

“However, the third leg is the one that I am not looking forward to, because of all the problems and randomness involved. The Southern Ocean leg from Auckland to Brazil is always a good one. That’s the one I am really looking forward to.”

“Going east, the challenge is clearly to stay in front, and just to win the race. That’s why we are here.”

Trusting your instincts So after two long legs covering over 20,000 km, what now dictates success? Is it the use of charts, technology and data, or is it now more experience and gut instinct?

Winds of change Cape’s navigational skills came to the fore during the closing stages of the second leg when he noticed a wind change and got skipper Bouwe

“It’s a bit of both – 50/50, I think,” says Cape.

“Some of the situations we will face will be similar to other stages in the race, so here, having the

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CHINA’S MOUTH-WATERING INVESTMENT OPPORTUNITIES Dieter Küffer “The world’s most populous country, China, is one of the areas that offer many investment opportunities in water and waste infrastructure,” says Dieter Küffer, water specialist and portfolio manager at RobecoSAM.

Water is a precious resource in short supply. Longterm trends such as population growth, increasing water consumption per person, and pollution are major drivers of water scarcity. This is aggravated by an inadequate water infrastructure.

More cities, more demand for water In China, major drivers of water challenges are continuous urbanization, the insufficient build-up of infrastructure and pollution, says Küffer. “Over the last 30 years, China’s urban population has grown tremendously. In the early 1980s, around 20% of the population lived in cities, against 53% in 2014.

As the Chinese government aims to promote economic growth and consumption, urbanization is likely to continue. The urban population is projected to account for 70% of China’s total population within the next 15 years. As a result, urban demand for water is expected to increase by 70% to 100% from 2005 to 2025, according to research by McKinsey Global Institute in 2009.

Supply is lagging, however. Although China is home

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to 20% of the world’s population, it only has 7% of the world’s freshwater resources.”

Building up water infrastructure “All this means that more water distribution networks, sanitation systems and wastewater treatment facilities need to be built, especially because current infrastructure investments have not kept pace with the speed of urbanization,” Küffer explains. As a result, growing demand is benefiting water providers located farther away, which pump more water over longer distances to consumers, and use more sophisticated water treatment technology that enables water recycling.

Troubled waters The drawback of China’s economic growth is increasing water pollution. The water quality of 61 key lakes and reservoirs was surveyed. Küffer cites research by the Communiqué on Land and Resources of China in 2012 by the Ministry of Environmental Protection which showed that 40% of China’s water was graded of very poor quality and not suitable for any human contact. “High concentrations of heavy metals and chemicals

compounds are present in both surface and ground water,” he says. “This is partly due to low treatment rates and wastewater collection efficiency. As a result, the wastewater discharged is not captured and treated before being released back into the natural waterways.”

government, one of the measures in the plan is to increase water pipe networks from 166,000km in 2010 to 325,000 km by 2015 to improve distribution and collection efficiency. Currently around 50% of this target has been met.

Opportunities for investors A government priority Recognizing the country’s water challenges, the Chinese government has made water one of its priorities. In its 12th Five Year Plan (2011-2015), it has allocated RMB 3.4 trillion (USD 547 billion) to environmental protection, including waste water treatment, water efficiency improvements, and distribution. In addition, it has imposed pollution targets on each province, which will be enforced more vigorously. According to the Chinese

The water challenge presents significant opportunities for providers of water and waste water treatment technologies. According to Küffer, one of the growth areas is industrial water treatment – for example in the textile, mining, energy, and petrochemicals industries – which is currently very low in China. ”Companies providing water distribution and wastewater treatment solutions in China are expected to benefit,” Küffer concludes.

‘China needs to sharply increase its wastewater treatment and waste management capacity’

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VOLVO OCEAN RACE Facts & Figures – This is the 12th edition of the race, and the 5th under the name Volvo Ocean Race – The Netherlands and Sweden (Volvo’s home country) have the strongest history in the race in terms of the number of teams and sailors taking part – 7 teams are in this edition, including the first women’s team (Sweden) in over a decade – Each boat has 8 sailing crew and one on-board reporter – Some 22,000 corporate guests will be invited at stopovers and other hospitality events by sponsors of the race and the teams – The total TV audience is expected to be 1.65 billion people, on a par with the Olympics and World Cup The teams in the race are: – The Netherlands: Team Brunel – Abu Dhabi: Abu Dhabi Ocean Racing – China: Dongfeng Race Team – Sweden: Team SCA (all-female) – America/Turkey: Team Alvimedica – Spain: Team España – Denmark: Team Vestas Wind The other sponsors of Team Brunel are: – Brunel: project management, staff secondment and consultancy – Schouten Global: training and development – Moduleo IVC: premium vinyl flooring – Sub-sponsors: Gaastra (teamwear); Ernst & Young (accountancy)

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‘China cut interest rates and

markets rose strongly’

FRESH OPPORTUNITIES IN ASIA Arnout van Rijn Robeco’s Asian equities team is more bullish on the region’s stocks than before, thanks to improved prospects for the China market.

“We turned bullish on Asian equity markets in September 2014, mostly on the idea that worries about China were more than priced in. Any relief here would pull the whole region back up again,” says, Arnout van Rijn, Chief Investment Officer for Robeco Asia Pacific.

story for Japan really focuses on the bottom-up improvements that you see in corporates. Generally they are evolving towards more shareholderfriendly behavior, so we are seeing more share buybacks, dividends being raised, and a nice tailwind from the weakness of the yen.”

“And that is what happened – China cut interest rates and markets rose strongly. Before, I was just bullish on Japan and considered other Asian markets to be range-trading. So we’re more bullish on the region than we have been for quite some time.”

“So we do think that earnings growth in Japan will be pretty solid, even though the domestic economy may be going nowhere. And that is combined with pretty low valuations for Japanese equities, which makes us quite bullish.”

Better corporate governance Bottom-up stock picking The top-down approach is relevant, but you don’t need strong macroeconomics to find great stocks, he says. Japan is a perfect example of how you can pick winners, even if the over-arching environment is more negative.

“It’s hard to make a bullish case from the topdown perspective in Japan; its central bank is trying to create some inflation but it doesn’t seem to be working very well,” he says. “The bull

Van Rijn says much of the renewed attractiveness of Asian stocks is due to improvements in corporate governance, partly thanks to pension fund pressure.

“A new corporate governance index in Japan is being followed by the largest domestic pension fund – if you don’t have independent directors or if your return on equity is too low, you can be disqualified from this index,” he says. “It’s really pushing the discussion in the boardroom in Japan into a more Western style of thinking about creating shareholder value.”

“Likewise, the national pension fund in South Korea, a very large shareholder that owns about 8% of the domestic equity market, has started to demand that companies improve their pay-out ratios. That’s the thing that I think will drive the South Korean equity market, particularly if interest rates stay low or go lower, and dividend yields go up.”

“Last year South Korea was the weakest equity market in the region, but it’s one of our favorites for 2015. The Korea (corporate governance) discount is bigger than ever just as companies start to address the root cause of it.”

which was one reason to be underweight.

Resources stocks have been under pressure and the overall domestic economy is also weak. In some sectors valuations start to look more appealing. Our underweight stance may not last for all of 2015.”

Van Rijn has not been invested in Indonesia since 2013 after the rupiah fell badly. “Currency moves can be powerful and over-riding, and it’s a big mistake to ignore currency risk in this region,” he says. “You can find many good stocks, but if the currency moves against you, you still lose your shirt.”

Avoiding Australia and Indonesia Elsewhere, opportunities are more limited says Van Rijn. “We are neutral on India. We do believe it is a bull market but it is hard to find attractively priced stocks. We need to see inflation come under control – and there are signs of that now – so discount rates in our models can be reduced to make the valuations work.”

“Australia has seen a lot of currency weakness

This publication is intended to provide investors with general information on Robeco’s specific capabilities, but does not constitute a recommendation or an advice to buy or sell certain securities or investment products.

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