Robeco's April Newsletter
Emerging market debt is coming of age as an asset class that can now benefit from a weakening dollar, our monthly outlook says.
This month we outline how the new world order of uncertain trade policy and tariffs will affect equities and credits in Q2, give five examples of how we invest in Sustainable Stars, and ask: 'What is the perfect quant stock'.
Emerging market debt: Coming of age
A weakening dollar and improving fundamentals are making emerging market debt an attractive asset class in its own right.
- Shift in US exceptionalism weighs on upward dollar strength
- Emerging markets bonds are now a USD 8 trillion asset class
- Picking winners, avoiding losers vital for navigating EMD portfolios
Equities Outlook: The new world order
Trade policy fears amid the crumbling of old certainties gives active equity investors an opportunity to outperform.
- US equities are beset by fears over both growth and inflation
- European equities are underpinned by projected fiscal stimulus
- Emerging markets performance is mixed, reflecting trade policy uncertainty
What we look for in Sustainable Stars
The unconstrained Sustainable Global Stars strategy looks for quality stocks. Here are five examples of what the fund holds.
- Stock selection in our Sustainable Global Stars strategy is style agnostic
- We invest in stocks across the whole spectrum: deep value to high growth
- What they have in common – strong FCF and ROIC – is more important
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Credit Outlook: Divorce and dispersion
The growing divergence between the US and the rest of the world is shifting credit flows toward Europe and Asia.
- Investors are ‘tariffied’
- Reindustrialization in Europe takes the form of tanks instead of cars
- Flows moving out of the US into Europe and Asia
The tables have turned for EM stocks
Global markets are reeling from unpredictable US policy shifts – from tariff wars to geopolitical moves – all of which has left emerging market equity investors on edge. Positioning portfolios for 2025 and beyond demands a clear grasp of regional, country, and sector dynamics. Investors are looking for alternatives to US Big Tech companies and start adding regions with more attractive valuations and decent prospects.
"So how do you find strong stocks without overpaying?"
In the fourth of this new series on Quant Investing we meet again with Matthias Hanauer, Quant Researcher at Robeco, to find out more about the perfect quant stock.