RobecoSAM Sustainable Water Prepared for RL360 30 th March 2020 In cooperation with For professional investors For professional investors only – not for further distribution
Agenda Rob obec ecoSAM Sustainable le Water • Investment Case • Portfolio • Performance • Appendix 2
01 | Investment Case
Sustainable solutions to water scarcity Investment case Lim Limit ited ed water res esources face ce Demand of De of majo jor water Solu olutions are cri critic ical to o chall ch llenge of of kee eepin ing up with ith con onsumers con onti tinues es to o gr grow survival risin rising dem emand • • • Global demand for water already Population growth, urbanization Efficiency gains for more exceeds water supply and water-intensive dietary economical water use changes • • The water deficit will become Wastewater treatment: water • even more acute in the future Industry is the second-largest recycling, water reuse and consumer, especially in avoidance of pollution emerging markets • Infrastructure investments: leakage reduction, desalination, analytics 4
Water demand is driven by life style changes Investment opportunities Lit Liters s of of water use used per per ki kilo logram of of food ood pr produced Source: www.waterfootprint.org 5
Challenges in Developed countries – Investment opportunities Micro pollution in lakes and rivers Cha Challe lenges • Pharmaceutials; pain killers, anti-inflammatory and anti-bacterial substances • Antibiotic resistant bacteria • Pesticides • Narcotics Acti ctions • Switzerland plans to invest 1.2 bio. CHF in 20 years to upgrade 100 waste water plants Source: EAWAG 6
Trend selection and investment scope Investment scope Cap Capital Goo Goods s & Che Chemicals s Ut Util ilitie ies • Valves & Pumps • Water Utilities • Treatment Systems • Multi Utilities • Treatment Chemicals • Irrigation Systems Con Constr truction & Materials s Quality & Ana Qu naly lytics • Engineering & Construction • Water Analytics • Building Materials & Fixtures • Point of Use Treatment • Water Meters • Maintenance Services • Resources Protection 7
Xylem – Capital Goods & Chemicals Investment case Sm Smartball lea eak de detection Robotic cr crawler pip pipeline inspection Water meters Ultr Ul traviole let dis disin infection Reverse osm osmosis is Water anal analytic ics Source: Xylem‘s website; Video: https://www.youtube.com/watch?v=sfoBAW2FwG8 References to specific securities are presented to illustrate our investment philosophy and are not to be considered recommendations. The specific securities identified and described do not represent all of the securities purchased, sold or recommended for advisory clients. It should not be assumed that these securities were or will be profitable. 8
02 | Portfolio
Portfolio characteristics – cluster weight changes Capital goods & chemicals Utilities 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Irrigation systems Treatment chemicals Treatment systems Valves & pumps Water utilities Multi utilities Construction & Materials Quality & Analytics 30% 40% 35% 25% 30% 20% 25% 15% 20% 15% 10% 10% 5% 5% 0% 0% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Maintenance services Point of use treatment Building materials & fixtures Engineering & construction Water meters Resource protection Water analytics Source: RobecoSAM. Data as of 31.12.2019 10
Portfolio exposure (1/2) Cluster exposure Sector exposure Market capitalization exposure (excluding cash) (Global Industry Classification Standard (excluding cash) excluding cash) 0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 50% 0% 20% 40% 60% 80%100% 41.1% Industrials 43.8% 35.1% 51.7% 11.0% Quality & Analytics Large caps (>USD 28.7% 45.1% 10bn) 20.3% Health Care 10.6% 93.4% 13.0% 18.0% 25.5% Utilities 27.5% Construction & Materials 3.4% 23.3% 42.6% 9.0% Consumer Mid caps (USD 2- 5.8% 48.5% Discretionary 10bn) 10.3% 6.6% 19.7% Capital Goods & 6.7% Chemicals Materials 5.5% 18.7% 4.4% 3.7% 5.7% Information 5.4% Technology 17.3% Small caps (<USD 2 6.4% 19.7% bn) Utilities 1.2% 29.3% Consumer Staples 1.0% 8.3% RobecoSAM Sustainable Water St Strategic Theme Reference* MSCI World Index TRN ra Source: RobecoSAM. Data as of 31.12.2019 *Refers to the Strategic Theme Reference (STR): market cap adjusted reflection of the universe. This information is included solely for illustrative purposes regarding economic trends and conditions or investment processes. It should not be assumed that any investments in sectors and /or markets identified were or will be profitable. The information presented is based upon a representative account in the composite. Each investor’s portfolio is i ndividually managed and may vary from the information shown. 11
Portfolio exposure (2/2) Regional exposure Country exposure Currency exposure (excluding Cash) (Company domicile, excluding cash) (including cash) 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 45.3% 43.1% United States 42.4% USD 44.9% 46.6% 63.3% 63.6% America 48.9% 8.7% 20.6% 66.7% China 6.2% EUR 13.9% 10.6% 8.2% 8.0% Switzerland 4.4% HKD 6.1% 35.8% 3.1% 1.1% Europe 35.0% 7.8% 7.8% 21.0% United Kingdom 12.1% CHF 4.4% 5.5% 3.1% 7.2% 7.4% France 6.6% GBP 12.1% 17.6% 3.8% 5.5% Asia 15.1% 5.9% 5.6% 12.1% Japan 5.9% JPY 5.9% 8.2% 8.2% RobecoSAM Sustainable Water St Strategic Theme Reference* MSCI World Index TRN ra Source: RobecoSAM. Data as of 31.12.2019 *Refers to the Strategic Theme Reference (STR): market cap adjusted reflection of the universe. This information is included solely for illustrative purposes regarding economic trends and conditions or investment processes. It should not be assumed that any investments in sectors and /or markets identified were or will be profitable. The information presented is based upon a representative account in the composite. Each investor’s portfolio is i ndividually managed and may vary from the information shown. 12
Portfolio characteristics RobecoSAM Sustainable Water Fund (31.12.2019) RobecoSAM Sustainable MSCI World Index TRN Water Fund Average Weighted Market Cap USD (m) 21'628 200'230 Dividend Yield 1 year 2.02 2.35 Ex-ante Beta versus MSCI World Index TRN 0.86 1.00 PEG 2.27 1.87 Price Earnings Ratio (next 12 months) 20.74 20.83 EV/EBITDA (next 12 months) 13.34 13.75 EPS Growth (next 12 months) 9.12% 11.11% Ex-ante Volatility 11.01% 12.17% Active Share 98.52% - Source: RobecoSAM. Data as of 31.12.2019 The data stated above may differ form data on the monthly factsheets due to different sources. 13
Current portfolio focus areas Cluster Current focus Currently less attractive • Water treatment systems Capital Goods & Chemicals (attractive growth opportunities) • Water heaters (replacement Construction & Materials business) Quality & Analytics • Water analytics (solid growth) • Waste management (valuation) • U.S. water utilities (valuation) Utilities • French utilities (cost savings) • Brazilian water utilities (risks) Source: RobecoSAM. Data as of 31.12.2019 14
Portfolio top 10 holdings RobecoSAM Sustainable Water Fund (31.12.2019) Company Country* Company Focus Weight Agilent Technologies Inc United States Analytical instruments & software 5.14% Thermo Fisher Scientific Inc United States Leading quality analytics provider 4.32% Suez France Well diversified multi-utility 4.03% Danaher Corp United States Leading provider of testing & analytics 3.56% Guangdong Investment Ltd China bulk water supplier to Hong Kong 3.33% Ecolab Inc United States Global leader in water, hygiene and energy technologies and services 3.28% Haier Electronics Group Co Ltd China Leading Chinese supplier of water heater & water purifier 3.07% PerkinElmer Inc United States Diagnostics and laboratory services 2.92% Veolia Environnement SA France Well diversified multi-utility 2.82% Masco Corp United States Leading supplier of plumbing 2.80% Total 35.28% *Company Domicile Source: RobecoSAM. Data as of 31.12.2019 The data stated above may differ from data on the monthly factsheets due to different sources. This information is included solely for illustrative purposes regarding economic trends and conditions or investment processes. It should not be assumed that any investments in sectors and /or markets identified were or will be profitable. The information presented is based upon a representative account in the composite. Each investor’s portfolio is i ndividually managed and may vary from the information shown. 15
03 | Performance
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