# ROB«CO
The Investment Engineers
Last month's performance
6lobal equity markets kicked of the fourth quarter with a strong rally. The Dow Jones index even clocked the big gest monthIy gain since January   rising 14% in October.	this is not necessarily a great sign. The biggest gains often come on the heels of big declines as is the case this year.			investors are clearly heartened by the fact that a lot of the interest rate increases have   priced into the		and speculation about whether the Federal Reserve may pause the pace of rate hikes is increasing. Even a dovish pivot towards a softer economic policy is making the headlines, although that seems unlikely.
The main question that	to the sumace last month was whether the era of BigTech is now finally over. The world's
and	except		news was	good. Meta	was hardest hit and lost nearly a third of its value, while founder Mark	has seen roughIy 100		in private wealth go up in smoke over the past twelve months. Meta is investing heavily in the metaverse, and investors are skeptical, to say the least. However, also AI	Microsoh and	 indicated that investors shoul d expected soler growth going forward. All of them saw billions being wiped off their values as investors began to worry that their best days were behind them. The future will tell, but surely the super excess returns of the past decade will indeed  a		of the past
Despite the carnage in Bip	the SAP-500 Index rose 8.0% to limit the year-to-date damape to  European stocks in 
the FTSE Eurotop 100 index also fared well with a 6.0% gain. European stocks have outperformed their US peers so far this year, although the	dipit decline in the euro versus the dollar is obviously a help. Japanese stocks gained  and 
remain within striking distance of a positive return. If Japanese equity markets manage to rise another ”3% over the coming 
two	they'll  among a very small group of major markets to repos positive returns for the year.	emerpinp 
markets dropped another 3% acer last month's 12% drop, mainly driven by weak Chinese equity markets
The MSCI World All Country Index (in	rose by 5.1% (6.0% in	in	Robeco 6		Consumer Trends lagged returned		USD)	year-to-date		at a		(-
USD)

## Portfolio review
Oigital transformation o[conSumption
Technology stocks gained pround in October acer months of losses. Digital payment stocks were among the performers 
with Adyen  and Block  doing  and Visa  stole the show. Visa reposed double-dipit payment volume 
growth with the fastest prowth in the hiqhly	cross-border seqment. The fact that payments companies are well- 
protected against inflation (which is reflected in transaction values) makes them relatively attractive in the current difficult 
operating environment. Despite linperinp regulatory concerns Visa remains relatively well-positioned to weather a potential
eC0 n0MiC Sl0Wd 0Wn.
Another strong positive contributor in October was streaming service Netflix, whose shares increased	!Investors were positively surprised by the growth in	as well their future	guidance. Furthermore, investor confidence in 
the potential su ess of	fonhcoming ad-supported service tier is increasing.
The fact that the collapse in Big Tech	result in an overall decline of technology stocks was perhaps remarkable. Meta Platforms (-31%), AMaZOn	 (-1%) all disappointed from an earnings	with all companies 
penalized for their continued spending. Of course we have no investment in Meta Platforms, but as an important
of the   FANG	it’s still a company we track closely. Apple (+11%) was	the mepa cap with the best 
operating results, with iPhone revenue coming in relatively in line with expectations, a pretty strong result given the 
significant currency headwinds.
Our emerging mid dIe class trend had a negative	last month. Especially Chinese tech names sold of after the Chinese Communist Pany Congress did not really offer a reprieve for technology stocks. Alibaba	Tencent (-23%) and Pinduoduo (-12%) all lost significant value as investors rushed to the exits. No easing of the pandemic restrictions,  most importantly  increased grip on power led to a significant lack of trust from foreign investors. The local Shanghai Composite index	to limit the drop to 4% for onshore investors, but the Golden Dragon index which tracks US-listed shares in Chinese companies dropped a massive 25% to signal their discomfort with Xi's tightening grip.
Shares of Hindustan Unilever dropped 5% after a very strong	so far this year. The company reported 16% growth with 4% volume growth and about	from pricing. The gross margin compression of nearly 600	points disappointed investors as the company did additional consumer promotions. Despite offsetting some of the cost pressures by rationalizing media spend and other overhead	the flow through on operating margins was still severe. The company did suggest that	past the trough as gross margins should start to inflect higher over the next couple of quavers.
Health	Wellbeing
Our health	well	trend had a negative	last month. Estee Lauder	and L’OréaI (-4%) shares both dropped for the third consecutive month given investor anxiousness on their China exposure as covid relaxations still seem unlikely until mid-2023. Consumer staples in general were among the weakest stocks in the market as input costs are putting pressure on margins. Ingredients firm Civaudan		reported results that fell short of expectations, with the taste and well	 division the main culprit. Tissue ma her Unicharm (-5%) fell as US peer		Clark reported a disappointing set of results with cost pressures not
Lululemon	got a delayed response to their excellent quarterly earnings from last month. The company had raised its full year guidance to "26% sales growth with steady margins. As soon as sentiment among investors stared to improve, the positive fundamental story for Lululemon shares gained traction. F   shares of EssilorLuxottica	rose
after reporting a solid set of results. Especially their sun wear division grew	and EssilorLuxottica is probably among the few companies where margins can structurally	also due to further self-help
Portfolio changes
Aker the Chinese Party	investor skittishness about companies with exposure to China has increased. We've cut our investments in companies which depend on China for a large part of their growth. We've sold out of our position in Adidas as		cut	goods	and
(Estee Lauder and L’OréaI)
Within our digital consumer trend we've cut Zoom Video Communications and cable company Charter Communications from the portfolio. For Video the small-and-mediUM-SiZ9d businesses segment keeps on disappointing with respect to customer churn. Nearly the same is applicable to Charter where new customer signups have	and video
losses are aaelerating.	taken advantage of the recent rally in equity markets to lower the weights in positions where our		decreased
We have added three new names to the portfolio.   we		a new position in United	which is the leading US health insurer and health service provider (Optum) in the US. United Health is an extremely well run	with 8-10% long-term revenue growth and mid-teens earnings growth. We also added discount retailer Dollar General to the portfolio as dollar stores are positioned to benefit from US consumers tra ding down to cheaper products. Dollar General is the largest dollar store chain with over 18,000 locations with	margins and store productivity. The shares have historically been very resilient in economic slowdowns or recessions. F  we bought an initial position in Unilever. Unilever has strong positions in many personal care categories and a strong foothold in emerging markets from India to Indonesia. Unilever has stepped away from their ambitious margin targets and is restructuring their business to get revenue growth back to historical levels. The valuation is very supportive and assumes little progress.
3
|  |
| --- |
| 1 | Visa | Digital Trantformation of Contumptior | 4.6% |
| 2 | C0ttc0 | Heaitr a weibei«s | 4.2% |
| 3 | Alphabet | Digital Trantformation of Contumptior | 3.9% |
| 4 | Neife | Health 8 Wellbeing | 3.7% |
| 5 | UU6M0n | Health 8 Wellbeing | 3.6% |
| 6 | Mirosoft | Digital Trantformation of Contumptior | 3.6% |
| 7 | Apse | Digital Trantformation of Contumptior | 3.6% |
| 8 | Ad en | Digital Trantformation of Contumptior | 3.6% |
| 9 | lntuit | Digital Trantformation of Contumptior | 3.5% |
| 10 | LVMH | EmegingMidJeñav | 3.5% |

Translation (ENES, 2022-10-31):
# ROB«CO
The Investment Engineers
Resultados del mes anterior
Los mercados globales de renta variable iniciaron el cuarto trimestre con fuertes alzas. El índice Dow Jones incluso se anotó el mayor avance mensual desde enero de	tras anotarse un	en octubre. Sin		ello no es necesariamente una	señal. Los grandes avances suelen venir después de grandes	como ha sido el caso este año. No para los inversores es muy tranquilizante el hecho de que los mercados descuenten un considerable aumento de
los tipos de	y gana enteros la especulación sobre una moderación en el ritmo de subida de tipos de la Reserva Federal. Incluso un		giro acomodaticio de la política económica está adquiriendo carta de naturaleza, aunque parece poco probable.
El principal tema que transpiró el mes pasado es si ya se ha			definitivamente la era de las Big Tech. Las principales empresas tecnológicas del mundo presentaron sus resultados trimestrales, con unos datos que distaron de ser	para la	salvo en el caso de Apple. La peor parada fue Meta Platforms, que perdió cerca de una tercera parte de su mientras que Mark		su fundador, ha visto			unos	millones de USD de su fortuna personal en los doce últimos meses. Meta está invirtiendo con fuerza en el metaverso, aunque los inversores se muestran como mínimo escépticos.		AIphabet, Microsoh y Amazon		señalaron que los inversores	esperar un menor crecimiento en el futuro. Todas ellas vieron desaparecer miles de millones de su	al empezar a temer los inversores que sus mejores días hayan quedado atrás. El futuro lo	aunque es seguro que los		excedentes de rentabilidad de la última década son de hecho cosa del pasado.
Pese a la debacle de las Bip Tech, el índice SAP-500	un  y recorta sus pérdidas del año hasta el 19%. Las aviones 
europeas del índice FTSE Eurotop 100 también se componaron	con un avance del	Las aviones 
europeas se imponen a sus homóloqas estadounidenses en lo que llevamos de  aunque la caída de dos dígitos del euro 
frente al dólar tenpa mucho que ver en ello. Las aviones aponesas üVánZü fan U0  y no están muy lejos de entrar en 
positivo. Si los mercados bursátiles	consiguen	alrededor de otro 3% en los próximos dos	se 
encontrarán en un grupo muy reducido de mercados importantes que presentan un rendimiento positivo en el ano. Por 
último, los mercados emergentes perdieron otro 3% tras la caída del   del mes pasado, lastrados		todo por la

## de las bolsas chinas.
En	(en	en USD).
superado	de	y	un	en	con unas que se sitúan ahora en un decepcionante			in USD).
Análisis de la cartera
Transformación digital del c0nsumo
Después de meses a la		las aviones tecnológicas saca on pecho en		Las empresas de pagos se contaron entre las más	con un		comportamiento de Adyen		y Block		mientras que Visa	fue el valor estrella. Visa declaró un crecimiento de los volúmenes de pago de dos dígitos, registrando el mayor aumento en el muy segmento		El hecho de que las empresas de	está n bien protegidas frente a la inflación (lo que
se refleja en el valor de las transa iones) las hace relativamente interesantes en el difícil entorno operativo actual. A pesar de	dudas
En		la empresa de servicio de streaming Nettlix realizó otra abultada	positiva, al	sus acciones un	Los inversores se vieron gratamente sorprendidos por el aumento de sus		así como por su orientación el crecimiento futuro.	los inversores está n ca da	más convencidos de que el próximo nivel de servicio de
en la	puede ser un éxito.
El hecho de que el hundimiento de las Bip Tech no se tradu ese 9n U0 d9CIlV9 Ç9n9FüIlZüd0 de las aviones tecnológicas fue
sorprendente. Meta Platforms	(-9%) y Alphabet (-1%) decepcionaron desde el punto de vista de los

## beneficios, y fueron penalizadas por su gasto continuado. Aunque obviamente no tenemos inversiones en Meta
sipue siendo una empresa que seguimos de cerca por ser un importante	del “viejo” acrónimo FANS. Apple

## fue con diferencia la empresa meqacapitallzüda con mejores resultados operativos, con unos ingresos por el iPhone que se
asustaron más o menos a las expectativas, lo que tiene bastante mérito si se tiene en cuenta el adverso tipo de
2	Apple esquiva la debacle de las Big Tech