NN Global High Dividend

For professional use only Month ending 31 August 2021 NN Global High Dividend Strategy Brief Portfolio Management Strategy Description The Global High Dividend strategy invests in undervalued stocks that Bruno Springael offer attractive and sustainable dividend yields and is well-diversified Lead Portfolio Manager from a sector and country allocation point of view. Quantitative screening is combined with fundamental analysis to identify stocks Experience since: 1987 With firm since: 1987 that trade below intrinsic value coupled with an ability to grow their dividend in the future. We focus on finding attractive dividend payers from a valuation perspective and not the highest yielders.

Objective We aim to outperform the MSCI World net return index over a full market cycle, with an attractive risk-return profile and a higher dividend yield.

Investment Process We screen over 65,000 stocks on dividend yield, dividend sustainability, liquidity, quality and sentiment factors. The stocks which meet our minimum criteria are then subjected to a comprehensive evaluation based on fundamentals. Stocks ranking favourably in terms of dividend sustainability, valuation and risk considerations are eligible for inclusion in the final portfolio. Single stock weights are capped at 5% and will typically range between 0.4% to 2% depending on conviction levels.

Contribution to Process and Returns Responsible Investing Approach HIGH Dividend Focus VALUE Value / Growth We believe dividend investing is We believe value outper- For more information about our the preferred strategy for value forms growth over the responsible investing approach, investors. Dividends are the pri- long run. Value stocks please visit ri.nnip.com. mary source of equity returns trade below their intrinsic over time while dividend growth value and offer a margin SFDR classification is less volatile than earnings of safety as well as strong Article 8: For more information growth. Dividends serve as a GROWTH upside on improving about the environmental and LOW stable valuation tool and reliable expectations. Growth social characteristics promoted signal for the future prospects of stocks, on the other hand, by the fund, see our SFDR page a company. have high expectations on nnip.com. and offer limited room for HIGH Stock Selection disappointment. We believe that stock selection drives alpha generation. Our NN Investment Partners at a Glance strategy is supported by a large NN Investment Partners is the asset manager of NN Group proprietary fundamental research team, which is focused N.V., a publicly traded company. NN IP is headquartered in on identifying value ahead of The Hague, the Netherlands and manages approximately EUR consensus. LOW 298 bln* (USD 353 bln*) in assets for institutions and individual investors worldwide. NN IP employs over 900 staff and has Key Elements of the Strategy offices in 15 countries, servicing clients across Europe, North • Attractive through-the-cycle risk profile America, Latin America, Asia and the Middle East. • Distinct dividend-focused value investing style • Experienced and pioneering team - More than 20 years of expe- * Figures as of 30 June 2021 rience and one of the industry’s leading dividend-investing houses For more information on NN IP’s investment strategies or our mutual funds, please contact your sales representative or relationship manager. Or visit our website www.nnip.com

www.nnip.com NN Global High Dividend - Strategy Brief Reference performance for this strategy: NN (L) Global High Dividend (P Cap, EUR), gross of fees* As of 31 August 2021 1 Month 3 Months YTD 1 Year 3 Years (Ann.) 5 Years (Ann.) Since Inception (Ann.) Portfolio Return 2.69 5.85 19.81 31.51 9.79 9.21 6.06 Benchmark Return 2.95 9.66 22.24 31.47 14.41 13.50 6.91 Relative Return -0.26 -3.81 -2.43 0.04 -4.62 -4.30 -0.84 * Source: NN IP Performance Measurement. Benchmark: MSCI World (Net). Returns are presented after all transaction costs, but before Ongoing Charges (consisting of Management Fee + Fixed Service Fee + Tax d’abonnement). Returns include the reinvestment of income. Fund was launched on 2 May 2002. Past performance is no guarantee of future results and the possibility of loss does exist. The Ongoing Charges vary per share class – please refer to the share classes’ Key Investor Information Document.

Portfolio Developments Covid-19 sensitive subset of the consumer the discretionary universe • Global equity markets continued their upward momen- (Luxury Goods, Travel, …) also didn’t do well in the face of a Delta variant tum, driven by Information Technology induced pandemic revival in some regions. • All eyes on the September FED and ECB meetings and Portfolio Positioning tone on inflation Taiwan Semiconductor Manufacturing. We exited TSMC on valuation • We introduced Oracle, Trend Micro, Open Text and grounds. Although we acknowledge that TSMC is the undisputed leader in Anritsu to the portfolio foundry and remains a technology leader with good long term prospects, we think that all this and the prospect of Intel outsourcing them part of their business has now been more than factored in the multiple re-rating. Market Review August was one of the strongest months of the year for worldwide equi- Samsung Electronics. Although prospects for Samsung’s non memory ties, making the U.S. and European equities follow a smooth up-trend of businesses remain good and memory earnings remain solid, we exited the seven months with positive returns. Emerging Markets was the best per- stock as we think that at current valuation levels, the market may be too forming region even though commodities had a substantial sell-off during complacent when assessing the length and magnitude of the semicon- the first weeks of the month that suddenly recovered during the last week ductor cycle and related price declines. bringing no returns to investors. Oracle. New holding. The company is successfully shifting it’s on premise Inflation data turn out in different scenarios between the U.S. and Europe. businesses to the Cloud, capturing additional revenue streams and cus- While the U.S. lowered the CPI rate to 0.3%, the Eurozone increased its tomers, with better than expected margin resilience. A large majority of rate to 3.0% showing stronger signs of economic recovery. Also, the U.S. revenue is now recurring and largely sticky, making it a relatively cheap Q2 GDP data was presented lower than expected at 6.5%. Even though safe haven in an otherwise expensive IT space. monetary policy in the U.S. and the in the vast majority of Europe remains static, this month was different since the central banks of Hungry, Czech Trend Micro. New holding. Japanese maker of anti-virus and internet secu- Republic, and Iceland started tightening their monetary policy since the rity software. Valuation currently depressed in a context of muted revenue lowest rates of the pandemic. Also, Korea became the first Asian econ- growth traction, especially in the US, while capital expenditures run rela- omy to do so. The KCB increased its benchmark interest rate. tively high amid acceleration of Cloud investments.

Investment Performance Open Text. New holding. Enterprise Content Management software pro- Global equity markets moved higher. With the MSCI World DM index gain- vider with high proportion of recurring business, stable and high margins ing 3% in EUR. Investors largely shrugged off the fact that the revival of and strong cash generation, trading at undervalued multiples. Covid-19 infections is casting shadow on future growth prospects to focus on strong corporate profits and the pick-up in employment instead. Global Anritsu. New holding. Global leader in the telecom related measurement interest rates crept marginally higher, but not enough to reverse the out- device market with 50% market share for 5G cellular. Strong cash flow performance of the growth style, that did 1.7% better than value over the generator with a robust balance sheet (net cash since 2011) in an industry period (MSCI index in EUR). The portfolio slightly underperformed the with high barriers to entry. broad index. Outlook Sector performances led by Financials. Financials was the best perform- Following a period where the vaccines were showing an efficient control ing sector, followed by Utilities, Industrials and Information Technology. At of the virus, since the Delta, the panorama has changed in countries that the other end of the spectrum, Consumer Discretionary and Energy both were pioneers in vaccination roll-outs. The previous is the example of ended up the period in the red. Israel, were cases spiked to all-time highs of the pandemic then of having a summer where some days zero cases were reported. Meaning that the Financials most beneficial to relative performance. The fund benefitted immunity period of the vaccine has fade out and a booster of a third shot both of being overweight financials and from successful stock selection in has started. the area, with US trust bank Bank of New York and US Insurer Chubb as outliers. The vaccine booster is a step that the United States will soon follow and that other European countries such as the UK, Germany and France have Industrials and Utilities also good contributors. Security selection in already started to apply to the most vulnerable people in the population. Industrials, with Emerson contributing most, and in Utilities, with UK’s SSE The United States health officials are keeping an eye to the data from as most helpful, were other positive relative performance drivers. Being Israel before starting with the boosters at a massive scale. overweight the latter sector also helped. One important event will be the ECB meeting on the 9th of September, Information Technology and Communication Services strongest head- where it will be announced the interest rate decision that’s expected to winds. Security selection in both sectors and being underweight in continue at 0%. Nonetheless, some policymakers have started to show a Communication Services were strongest headwinds to performance. hawkish view since a recent spike in August inflation to 3.0% from 2.2% in Some of the fund’s holdings had a major contribution to performance - like July. The FED will also announce its interest decision in September and is Microsoft and Cisco – partly offset by a disappointing month for Apple not expected to increase the level since core CPI data has decreased and Samsung. Yet, the main detrimental effect came from not holding a from 0.9% in July to 0.3% in August. Ever since the March of 2020 few non-dividend paying index heavyweights like Alphabet, Facebook or decrease the U.S. interest rates have remained static at 0.25%. Netflix , that did very well on the back of strong earnings reports. September has been historically the weakest month of the year in the U.S. Consumer Discretionary space not helping. Our auto exposure suffered and many other global equity markets. There are many theories around this from the fact that the sector is plagued by an acute components shortage fact, but in the end the scenario will be determined by how investors react that disrupts supply chains and leads manufacturers to curtail (and fur- to the monthly changes in fundamentals. If the month end up positive, the ther revise down in some cases) production. At the same time, the momentum would continue and be the 8th month of positive returns.

2 Month ending 31 August 2021

Portfolio Highlights* Portfolio Characteristics Portfolio Characteristics Fund Benchmark Strategy Assets under Management €1,435 mln Dividend Yield FY1 2.5% 1.9% Ex-Post Tracking Error** 4.29% Number holdings 84 1,558 Beta of the Portfolio** 1.00 Large Caps 93.9% 96.8% Sharpe Ratio** 0.61 Mid Caps 3.7% 3.2% Volatility** 17.01 Small Caps 0.0% 0.0%

** 3-years annualised

Top and Bottom Monthly Contributors (%) Largest Active Positions (%)***

MICROSOFT CORPORATION 0.09% Top 5 Portfolio Active Weight Compagnie De Saint Gobain SA 2.7% 2.6% CHUBB LTD 0.09%

CISCO SYSTEMS INC Microsoft Corporation 6.0% 2.4% 0.08% (PRE-MERGER) Medtronic Inc 2.4% 2.1% SSE PLC 0.08% Cisco Systems Inc (Pre-Merger) 2.4% 1.9% MASTERCARD INC 0.07% Totalenergies SE 2.0% 1.8% APPLIED MATERIALS INC -0.09% Bottom 5 Portfolio Active Weight NISSAN MOTOR CO LTD -0.09% Corning Inc 0.4% 0.4%

NVIDIA CORPORATION -0.10% SAP SE 0.6% 0.4%

ALPHABET INC -0.14% Wells Fargo & Company 0.7% 0.3%

SAMSUNG -0.19% Qualcomm Incorporated 0.5% 0.2% ELECTRONICS CO LTD Apple Inc 1.8% -2.4% -0.30% -0.20% -0.10% 0.00% 0.10% 0.20%

Sector Positioning (%)** Monthly Performance Attribution***

21.75% Sector Stock Total Information Technology Sector 23.03% Allocation Selection Effect

19.12% Financials Cash & FX 0.00% 0.00% 0.00% 13.42% Communication Services -0.10% -0.02% -0.12% 12.98% Health Care 12.79% Consumer Discretionary 0.06% -0.18% -0.11% 11.61% Industrials Consumer Staples -0.01% -0.03% -0.05% 10.40%

8.05% Energy -0.10% 0.09% -0.01% Consumer Discretionary 11.62% Financials 0.06% 0.28% 0.33% 7.53% Consumer Staples 6.90% Health Care 0.00% -0.25% -0.25%

5.56% Energy Industrials -0.01% 0.20% 0.19% 2.82% Information Technology 0.00% -0.43% -0.43% 4.33% Utilities 2.76% Materials 0.02% 0.08% 0.10%

3.86% Materials Real Estate 0.02% 0.01% 0.03% 4.32%

2.16% Utilities 0.01% 0.06% 0.07% Communication Services 9.21% Total -0.06% -0.18% -0.24% 0.66% Real Estate 2.73%

0% 5% 10% 15% 20% 25% Portfolio Weight Benchmark Weight

Benchmark (Forward) Dividend Yields 4% 3.08% 3% 2.73% 2.24% 2.13% 2% 1.38% 1%

0% Asia Pacific ex Japan Europe Japan North America Emerging Markets

* Source: NN Investment Partners. All data are expressed as of 31 August 2021. ** Global Industry Classification Standard (GICS) enriched by NN Investment Partners Classification *** For the attribution data the mirror portfolio NN Hoog Dividend Aandelen Fonds was used.

3 NN Global High Dividend - Strategy Brief

Max Management Fixed Service Ongoing charges including Share Classes ISIN Currency Minimum Investment Fee (%) Fee (%) management fee (%) P Capitalisation LU0146257711 EUR 1.50 0.25 1.79 - P Distribution LU0146258529 EUR 1.50 0.25 1.79 - I Capitalisation LU0191250504 EUR 0.60 0.20 0.81 € 250,000 I Capitalisation (hedged i) LU1086911747 CZK 0.60 0.20 0.83 € 250,000 X Capitalisation LU0146259923 EUR 2.00 0.25 2.30 - X Capitalisation (hedged i) LU0295015480 CZK 2.00 0.25 2.32 - X Capitalisation LU0509951355 HUF 2.00 0.25 2.29 - X Distribution (Q) LU0804001013 EUR 2.00 0.25 2.29 - X Distribution (M) LU0976924166 USD 2.00 0.25 2.29 - X Distribution (M) (hedged ii) LU0976924240 AUD 2.00 0.25 2.31 - I Capitalisation (hedged i) LU0430558527 PLN 0.60 0.20 0.83 € 250,000 P Capitalisation LU0205422503 USD 1.50 0.25 1.80 - P share class NL0000289858 EUR 0.70 0.13 0.83 - X Capitalisation LU0205423220 USD 2.00 0.25 2.29 - P Distribution (Q) LU0430558790 USD 1.50 0.25 1.79 - I Capitalisation LU0205423733 USD 0.60 0.20 0.81 € 250,000

Key Characteristics of the Strategy Objectives Investment Style Value Investment Universe Global equities Benchmark MSCI (DM) World (Net) Index Although we do not have a predefined tracking error target, the tracking error range is Target Tracking error between 3-6% through the cycle Base Currency Euro Maximum Regional Exposure The regional weights are capped at 15% relative to the MSCI-World weightings To avoid concentration in a few sectors the overweight position of a sector relative to the MS- Maximum Sector Exposure CI-World sector weighting is capped at 10%. Number of Holdings Typically between 60 – 100

Disclaimer This marketing communication is intended for MiFID professional investors only. The prospectus and the Key Investor Information Document (KIID) (if applicable) This communication has been prepared solely for the purpose of information and and other legally required documents relating to the fund (containing information does not constitute an offer, in particular a prospectus or any invitation to treat, buy about the fund, the costs and the risks involved) are available on www.nnip.com or sell any security or to participate in any trading strategy or the provision of (section Documents) in the relevant languages of the countries where the fund is investment services or investment research. While particular attention has been registered or notified for marketing purposes. NN Investment Partners B.V. may paid to the contents of this communication, no guarantee, warranty or representa- decide to terminate the arrangements made for the marketing of the Fund in tion, express or implied, is given to the accuracy, correctness or completeness accordance with article 93a UCITS Directive and article 32a AIFM Directive as thereof. Any information given in this communication may be subject to change or implemented in Dutch law in article 2:121ca and 2:124.0a Wft. Information about update without notice. Neither NN Investment Partners B.V., NN Investment investor rights and collective redress mechanisms are available on www.nnip.com Partners Holdings N.V. nor any other company or unit belonging to the NN Group, (section Policies & Governance). Investment sustains risk. Please note that the nor any of its directors or employees can be held directly or indirectly liable or value of any investment may rise or fall and that past performance is not indicative responsible with respect to this communication. Use of the information contained in of future results and should in no event be deemed as such. This communication is this communication is at your own risk. This communication and information con- not directed at and must not be acted upon by US Persons as defined in Rule 902 of tained herein must not be copied, reproduced, distributed or passed to any person Regulation S of the United States Securities Act of 1933, and is not intended and other than the recipient without NN Investment Partners B.V.’s prior written consent. may not be used to solicit sales of investments or subscription of securities in coun- The fund is a sub-fund of NN (L) (SICAV), established in Luxembourg. NN (L) (SICAV) tries where this is prohibited by the relevant authorities or legislation. Any claims is duly authorised by the Commission de Surveillance du Secteur Financier (CSSF) arising out of or in connection with the terms and conditions of this disclaimer are in Luxembourg. Both the fund and sub-fund are registered with the CSSF. governed by Dutch law.