Robeco Global Consumer Trends Eqs I € |
by Jeffrey Schumacher
In a surprise announcement, Robeco's CIO of fixed income and sustainability Victor Verberk left the asset manager on 5 June 2023 to pursue other opportunities. Verberk joined Robeco in 2008 as head of investment-grade credit and co-head, along with Sander Bus, of the credit portfolio management team. He was promoted to CIO of fixed income and sustainability in 2020 and was a member of Robeco's executive committee since 2017. At the time of his departure, he was also a named portfolio manager on the Robeco Global Credits, Robeco Euro Credits, and RobecoSAM SDG Credit Income strategies. Going forward, Mark van der Kroft, who has been CIO of fundamental and quant equity since September 2020, will add the fixed-income and sustainability CIO responsibilities to his plate as the firm moves forward with only one CIO. At this stage, we are making no changes to our Parent Pillar rating of Above Average as a result of the leadership change. |
Robeco Global Consumer Trends Equities continues to benefit from talented portfolio managers and a solid investment process. It earns Above Average People and Process ratings, leading to Morningstar Analyst Ratings of Neutral for the most expensive share classes, while cheaper ones earn a Bronze rating. Our confidence in the portfolio managers at the helm remains high. Jack Neele and Richard Speetjens, who boast a collective track record of more than a decade on the strategy, have demonstrated their ability to analyse consumer-driven trends and their impact on business models and the competitive landscape. They show deep insights in the portfolio's holdings but also provide solid rationales for those that don’t make it in their thematic-driven portfolio. The duo collaborates closely with two dedicated analysts and leverage wider firm resources. While the team is adequately staffed, it remains compact and short on tenure versus category peers. We also note that the wider team has experienced turnover in recent years. The managers invest along three major trends: the digital transformation of consumption, the emerging middle class, and health and well-being. This blend of themes reduces overall portfolio risk. The managers have refined their approach over the years, leading to a conviction-based but diversified portfolio. After reflecting on the underperformance of 2021, the managers decided to emphasise their highest convictions, leading to a more concentrated portfolio focused on more established growth companies and a reduction in exposure to smaller and more speculative growth companies. While understandable, the decision may limit the managers' ability to generate alpha from a market segment that has contributed meaningfully to the strategy's long-term performance. In 2022, the managers actively reduced the allocation to high growth stocks by selling Shopify, Spotify, and Zoom. The (indirect) exposure to the Chinese economy also declined, as Tencent, Meituan and companies like Estee Lauder, Nike, and Richemont were sold. Proceeds were recycled into the health & wellbeing theme, where the team owns positions in companies exposed to vision care, diabetes and dermatology. Under Neele and Speetjens, the fund has built a strong record since inception, as the duo generated a positive alpha versus the MSCI ACWI Growth index. However, dismal performance in 2021 and 2022 has damaged the fund’s track record over shorter time periods and led to a roughly EUR 2 billion outflow from the fund, partly offset by new mandates. Rising interest rates, persistent inflation, and geopolitical tensions sent stocks into a tailspin in 2022, with growth stocks suffering from price multiples contraction, putting the strategy's valuation risk at full display. Despite the significant recent underperformance, the strategy's long-term track record remains solid. |
Morningstar Pillars | |
People | Above Average |
Parent | Above Average |
Process | Above Average |
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