High Yield Outlook Robeco High Yield Bonds Fund

High Yield Outlook Robeco High Yield Bonds fund

March 2018 Joop Kohler, Client PM HY

For investment professional use only. Not for use with the general public. The examples in this presentation are for information purposes only and not intended to be an investment advice in any way. Index

Robeco 3

Highlights Robeco High Yield Bonds fund 7

Team 8

High Yield Outlook 9

Positioning 27

Performance 32

Key Takeaways 40

Appendix 41

Robeco High Yield Bonds 2 Robeco

Robeco High Yield Bonds 3 Today Robeco part of ORIX

ORIX Corporation

ORIX Europe financial holding

Robeco RobecoSAM CanaraRobeco Harbor Capital Advisors Boston Partners Transtrend Equity, Fixed Income, Sustainability Investing Indian Equity and Fixed Manager of Managers US & Global Equities CTA Investment Solutions Income

Robeco High Yield Bonds 4 Figures

AuM: EUR 161 billion¹

877 employees of which 226 are investment professionals

Offices in 15 countries around the world

EUR 102 billion managed in ESG integrated assets

A+ / A score in UN PRI assessment

All figures per end of December 2017 unless stated otherwise ¹ as of December 2017

Robeco High Yield Bonds 5 Key figures: Assets under management

Assets under management Robeco > EUR 161 billion as of December 2017 > Credit accounts for 64% within Fixed Income

Assets breakdown Client type breakdown Institutional client type

 Equities 51%  Institutional 70%  Pension funds 60%  Fixed income 25%  Retail 30%  Bank & other financials 19%  Balanced 20%  Insurance 9%  Alternative investments 2%  Official institutions 9%  Money market 2%  Corporate 2%  Other 1%

Data per December 2017

Robeco High Yield Bonds 6 Highlights Robeco High Yield Bonds fund

> Truly global approach with proven track record since 1998

> First quartile ranking in international peer group on a 3Y, 5Y & 10Y period*

> Outperformance through the credit cycle in all environments

> World’s largest truly Global High Yield fund: €8.75 billion

> Long-term committed and experienced portfolio management & analyst team

> Conservative approach to High Yield investing, winning by not losing

> Unlocking small cap premium in a smart way

> Integration of ESG factors

Source: Robeco. * Morningstar peer group January 2018.

Robeco High Yield Bonds 7 Investment Professionals: Highly experienced & stable team

Ample resources to cover credit markets > More than 30 seasoned investment professionals with average experience of 17 years > Total Assets Under Management of EUR 26bn in credit strategies¹

Sander Bus Roeland Moraal Christiaan Lever Joop Kohler PM High Yield Bonds PM High Yield Bonds PM High Yield Bonds Client Portfolio Manager

Co-head Credit Team High Yield PM Team PM Industry: 22 years Industry: 21 years Industry: 8 years Industry: 13 years

Sander Bus Victor Verberk Taeke Wiersma Roberto Bella Jan Willem Knoll Marijn Davidse Head High Yield Head Investment Grade Co-head Credit Research Financials Financials Financials PM High Yield PM Investment Grade Financials London Industry: 22 years Industry: 20 years Industry: 22 years Industry: 29 years Industry: 19 years Industry: 11 years Roeland Moraal Jan Willem de Moor Jankees Ruizeveld Frances Pang Marian Pavlus Alexandre Fuentes PM High Yield PM Investment Grade Co-head Credit Research Energy Utilities & Energy Technology Telecom New York Industry: 21 years Industry: 24 years Industry: 23 years Industry: 19 years Industry: 16 years Industry: 8 years Christiaan Lever Peter Kwaak Jaap Smit Patrick Bawlf Evert Giesen Reade Kem PM High Yield PM Investment Grade Metals & Mining Utilities Automotive Paper & Chemicals New York Industry: 8 years Industry: 19 years Industry: 23 years Industry: 22 years Industry: 20 years Industry: 19 years Patrick Houweling, PhD Reinout Schapers Saepna Naick Amir Maani Shirazi Roel Ewalds Stephen Verheul PM Quant Credits PM Global & EM Credits Food & Beverage Consumer Cyclicals Healthcare & Pharma Non-Cyclicals/Industrials Quant Researcher Industry: 19 years Industry: 14 years Industry: 22 years Industry: 17 years Industry: 5 years Industry: 5 years Mark Whirdy Frank Reynaerts Joseph Huang Tiansi Wang Joost Breeuwsma PM Quant Credits Asian credit Asian credit Asian credit Analyst

Robeco Global Credit Team Credit Global Robeco Singapore Singapore Hong Kong Industry: 13 years Industry: 20 years Industry: 14 years Industry: 14 years Industry: Sep 2017 Erik Hylarides Hendrik Jan Kroon Robin Hempel Bank Loans/PP Bank Loans/PP Bank Loans/PP

Industry: 17 years Industry: 20 years Industry: 6 years

Quant Credit Research Sustainability Research Portfolio Engineering & Trading Client Portfolio Managers Risk & Compliance 4 Investment Professionals 9 Investment Professionals 24 Investment Professionals 6 Investment Professionals 28 Professionals

¹ Source Robeco, data end of December 2017

Robeco High Yield Bonds 8 High Yield Outlook

Benign fundamental environment, reflected in valuations

Robeco High Yield Bonds 9 High Yield Outlook: Highlights

Economic growth and record low dispersion > Global, synchronized growth with more upside > Leading indicators pointing to higher inflation

Credit spreads continue to tighten > Spreads can remain low for a very long time > Dispersion is expected to grow as cycle matures

A major shift in quantitative easing > Central banks risk being caught behind the curve > Expect less technical support, decompression and more vol

Source: Robeco

Robeco High Yield Bonds 10 Fundamentals

Global synchronized economic growth

Robeco High Yield Bonds 11 Fundamentals: Strong numbers for major economies

Data releases are very supportive > Strong PMI’s for the major Euro economies and US > Macro economic data releases beat expectations > Labor markets and consumer confidence indicators at extreme levels

Composite PMI’s positive Economic surprises positive

62 120 100 60 80 58 60 56 40 20 54 0 52 -20 50 -40 -60 48 -80 46 -100 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Germany France Italy US surprise Eurozone surprise China surprise Spain US >50=Expansion

Source: Bloomberg, Robeco Source: Bloomberg, Robeco

Robeco High Yield Bonds 12 Fundamentals: Impact US tax code on HY issuers

Mildly positive, but it’s still early days > Lowered corporate tax rate (21%), but interest expense deductibility capped (30% of EBITDA) > Higher leveraged cap structures are worse off > Impact on sectors varies (related to capex, current tax rate and net operating losses)

Percentage of issuers worse off after tax bill Industry constituents negatively impacted

90% 60% 80% 50% 50% 47% 70% 40%

Market value % value Market 40% Market value % value Market 60% 32% 50% 30% 25% 40% 30% 20% 20% 10% 5% 6% 6% 10% 0% 0% 0% High Yield BB B CCC

effect of interest deductibility all measures

Source: JP Morgan, S&P Capital IQ, Robeco Source: JP Morgan, S&P Capital IQ, Robeco

Robeco High Yield Bonds 13 Fundamentals: US leverage at peak levels

The credit cycle is aging > US IG leverage up on accelerated debt growth to fund M&A > HY leverage drops in 1Q17 from a cycle high, but remains elevated > Strong sales and growth momentum keeps leverage in check

US IG leverage all-time high US HY leverage concerning

1 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

HY Leverage Ratio Ex Commodities Leverage Ratio Adjusted Leverage

Source: Morgan Stanley Research, Bloomberg Source: Bofa Merrill Lynch, Bloomberg, Robeco

Robeco High Yield Bonds 14 Fundamentals: EU leverage is healthy

European corporates more cautious > Strong EBITDA growth pushing leverage numbers down > Cheap funding has not spurred equity-friendly activity (yet) > Strong Euro currency could be a drag on export heavy sectors

IG leverage declining HY net leverage also declining

Source: Morgan Stanley Research, Bloomberg, Company data Source: Morgan Stanley Research, Markit, Moody’s

Robeco High Yield Bonds 15 Valuations

Tightening again

Robeco High Yield Bonds 16 Valuations: Spreads can remain low for years

HY trades at 0.7x average spread, similar to IG & EM > Global HY from peak to through (2018) 50 bps wider, back at 340 bps > Euro HY more attractive than US HY > HY offers some protection in a rising rate environment

US and EU HY spreads HY US and EU rating-adjusted

9 9

8 8

7 7

6 6

5 5

4 4

3 3

2 2

Jul-17

Jul-16

Oct-17

Jan-17

Apr-17

Jun-17

Oct-16 Feb-17

Jan-16

Apr-16

Jan-18 Apr-16

Jan-18

Jun-16

Sep-17

Sep-17 Dec-17

Dec-17

Feb-16

Feb-18

Sep-16

Sep-16 Dec-16

Dec-16

Nov-17

Aug-17

Mar-17

Nov-16

Aug-16

Mar-16

May-17

May-16 May-16

US HY EU HY B U.S. High Yield - OAS Pan-Euro HY B Rating Only - OAS

Source: Bloomberg Barclays, Robeco Source: Bloomberg Barclays, Robeco

Robeco High Yield Bonds 17 Valuations: Spreads can remain low for years

Moving up in quality better risk-reward > Overall HY market is squeezed > CCC’s vs B’s trade below long term average > Up in quality in this environment preferred

In HY 68% trades below 300 bps CCCs vs Bs expensive

100 1,600 1,400 75 1,200

Nominal Value % Value Nominal 1,000 50 800 600 25 400 200

0 0

Jan-11

Jan-17

Jan-13

Jan-12 Jan-15 Jan-11

Jan-14

Jan-16

Jan-18

Jan-10

Jan-17

Jan-13

Jan-12 Jan-15

Jan-14

Jan-16

Jan-18

Jan-01 Jan-10

Jan-09

Jan-08

Jan-07

Jan-99

Jan-03

Jan-02 Jan-05

Jan-04

Jan-06 Jan-09

Jan-08 Jan-00

0-200 200-300 300-500 500-700 700-1000 1000+ CCC - B spread median

Source: Bloomberg Barclays, Robeco Source: Bloomberg Barclays, Robeco

Robeco High Yield Bonds 18 Valuations: Examples of rising dispersion in Telecoms

Altice Luxembourg Frontier and Windstream > Equity and bonds dropped after bad Q3 results > Unsustainable business models > Focus of management is to bring leverage to 4x > CDS spreads accelerated after poor quarterly results > Spread reaction was overdone, we bought at 93 > We maintain our underweights

Altice price graph CDS spreads of Frontier and Windstream

115 3,000

110 2,500

2,000 105 1,500 100 1,000 95 500

90 0

Jul-17

Oct-17

Apr-17

Jun-17

Oct-17

Feb-17

Apr-17

Jan-18 Jun-17

Sep-17

Dec-17

Feb-17

Feb-18

Jan-18

Sep-17

Dec-17

Nov-17

Aug-17

Feb-18

Mar-17

Nov-17

Aug-17

Mar-17

May-17 May-17

Altice Holdco 6.25 02/15/2025 Frontier CDS spread Windstream CDS spread

Source: Bloomberg, Robeco. Source: Bloomberg, Robeco. These examples are for information purposes only and not intended to be an investment advice in any way These examples are for information purposes only and not intended to be an investment advice in any way

Robeco High Yield Bonds 19 Valuations: CDS and reverse yankees

CDS offers liquidity to efficiently adjust portfolios Reverse yankees are attractive > We reduced risk via CDX HY position end of Jan 2018 > Netflix issues in dollars and euros > Markets sold off first week of February 2018 > Euro investors demand higher spread premium > We added risk in Xover mid February > We added euro Netflix bonds in our fund

CDX vs Itraxx Xover Netflix $ vs € 400 120 380 360 100 350 340 320 80 300 300 60 280 250 260 40 240 200 20 220

200 150 0

Jul-17

Oct-17

Jan-17

Apr-17

Jun-17

Feb-17

Jan-18

Sep-17

Dec-17

Sep-17

Dec-17

Feb-18

Dec-16

Nov-17

Aug-17

Mar-17

May-17 May-17

CDX HY Itraxx Xover Difference (RHS) Netflix 4.375 2026 $ Netflix 3.625 2027 €

Robeco High Yield Bonds 20 Valuations: Move up in quality

Excess spreads over default losses have decreased > B’s and CCC’s do not compensate for default losses > Up in quality preferred > Skillful issuer selection remains key, BB’s over B’s and CCC’s

Default premium December 2017 Quality global HY index

100 50%

In bps In 45% 50 40%

Market value % value Market 35% 0 30% 25% -50 20% 15% -100 10% -150 5% 0% BB B CCC

Source: Robeco Quantitative Strategies. Assuming 40% recovery rate and historical avg 5 yr default rates. Source: Barclays Bloomberg, Robeco

Robeco High Yield Bonds 21 Technicals

A major shift in Quantitative Easing

Robeco High Yield Bonds 22 Technicals: We turned negative on technicals

Central Bank net buying to turn negative in 2018 > Monetary stimulus will be reduced massively > HY outflows YTD 2018 > Flows follow returns, not the other way around

Volatility finally moved up Fund flows

US HY Non-US HY Equities Commodities Munis Money Markets Loans All Fixed Income US IG EM Debt

-10.00 -5.00 0.00 5.00 10.00 15.00 20.00

2018 change 2017 change

Source: Deutsche Bank, Haver, Federal Reserve, ECB, BoJ, BoE Source: BofAML, Robeco

Robeco High Yield Bonds 23 Technicals: Volatility returns with Central Banks retreating

Expect increased market volatility in 2018 > Risk premiums will go up when QE retreats > Significant part of US credit is held by foreigners (30-45%) > Higher USD funding costs will impact Asian/European flows into US credit

Equity and Treasury volatility Hedging costs 45 120 2.5 40 100 2.0 35 1.5 30 80 25 1.0 60 20 0.5 15 40 0.0 10 20 5 -0.5

0 0 -1.0

Jul-17

Jul-13

Jul-15

Jul-14

Jul-16

Oct-17

Jan-17

Apr-17

Oct-13

Oct-15

Oct-14

Jan-15

Apr-13

Apr-15

Oct-16

Jan-14

Apr-14

Jan-16

Feb-17

Apr-16

Jan-18

Feb-15

Feb-16

Feb-18

Nov-17

Aug-17

Nov-15

Aug-15

Nov-14

Nov-16

Aug-16

May-17

May-15 May-16

VIX Index MOVE index (RHS) USD hedging costs IG USD/EUR 5/7 yr yield differential

Source: Bloomberg, BofaML, Robeco Source: Bloomberg, Bloomberg Barclays, Robeco

Robeco High Yield Bonds 24 Technicals: Covenant-lite supply at records

Issuers prefer the loan market, HY issuance is shrinking > Covenant-lite is present in all markets and increasing > Good for issuers, but recovery values will be lower when cycle turns > CLO-issuance also at record levels, late-cycle behavior

EU Leveraged Loans increasing Covenant-Lite European Institutional Term Loan Tranches 80%

70%

60% Nominal value % value Nominal 50%

40%

30%

20%

10%

0% 2013 2014 2015 2016 2017

Source: Markit, Morgan Stanley Research Source: Xtract Research

Robeco High Yield Bonds 25 Conclusion

> Fundamentals are positive, but tail-risks are ignored by Market Cycle: Mapping our view on market segments market

> Credit markets face net selling of central banks

> Keep beta’s below 1

> Stay up in quality

> Prefer Europe over the US

> Technological & regulatory headwinds for certain Source: Robeco, Morgan Stanley sectors: retail, pharma, telecoms

> Plenty of alpha opportunities for skillful asset managers

Source: Robeco The examples in this presentation are for information purposes only and not intended to be an investment advice in any way.

Robeco High Yield Bonds 26 Positioning

Robeco High Yield Bonds 27 Positioning: Sectors

Sector allocation Sector allocation Absolute weight Relative risk points

Other Other

Utility Utility

Other industrial Other industrial

Communications Communications

Transportation Transportation

Technology Technology

Energy Energy

Consumer non-cyclical Consumer non-cyclical

Consumer cyclical Consumer cyclical

Capital goods Capital goods

Basic industry Basic industry

Financial Financial

0% 5% 10% 15% 20% 25% -200 -150 -100 -50 0 50 100

 Robeco High Yield Bonds  Benchmark

Source: Robeco High Yield Risk Monitor, data end of January 2018. Benchmark: Bloomberg Barclays US HY + Pan Euro HY 2.5% Issuer Cap (EUR), ex financials. This example is for information purposes only and not intended to be an investment advice in any way

Robeco High Yield Bonds 28 Positioning: Currency & Region

Currency denomination Currency denomination Absolute weight Relative risk points

100% 200 80% 100 60% 0 EUR USD GBP 40% -100 20% -200 0% -300 EUR USD GBP -400

Regional allocation Regional allocation Absolute weight Relative risk points

80% 50

60% 0 Europe North America Emerging Other -50 40% -100 20% -150 0% -200 Europe North America Emerging Other -20% -250  Robeco High Yield Bonds  Benchmark

Robeco High Yield Bonds 29 Positioning: Rating & top-10 holdings

Rating allocation Rating allocation Absolute weight Relative risk points

60% 200 50% 100 40% 30% 0 > BB BB B CCC < CCC Other 20% -100 10% -200 0% -10% > BB BB B CCC < CCC Other -300

 Robeco High Yield Bonds  Benchmark

Top 10 active positions (as measured by riskpoints) Weight (w) Spread (s) Spread-duration (sd) (w) x (s) x (sd) Issuer Sector Port BM Delta Port BM Delta Port BM Delta Port BM Delta SELECTA GROUP BV Capital goods 1.3% 0.1% 1.2% 504 494 10 3.7 3.6 0.2 28 2 25 LIMITED BRANDS INC Consumer cyclical 1.0% 0.4% 0.6% 332 243 89 8.4 6.1 2.3 33 8 25 INTELSAT CONNECT FINANCE SA Communications 0.0% 0.6% -0.6% 0 1151 -1151 0.0 3.4 -3.4 0 24 -24 SPRINT CORP Communications 0.8% 1.6% -0.8% 203 334 -131 2.1 4.6 -2.6 3 27 -23 VRX ESCROW CORP Consumer non-cyclical 0.1% 1.4% -1.2% 243 439 -196 3.4 3.8 -0.4 1 25 -23 PULTE HOMES INC Consumer cyclical 0.9% 0.2% 0.7% 232 188 44 9.2 7.0 2.2 21 3 18 TELECOM ITALIA SPA Communications 0.3% 1.6% -1.3% 186 159 27 7.7 7.0 0.7 4 21 -17 IHEARTCOMMUNICATIONS INC Communications 0.0% 0.3% -0.3% 0 1887 -1887 0.0 2.6 -2.6 0 16 -16 NUMERICABLE GROUP SA Communications 0.1% 0.9% -0.8% 473 447 26 3.3 4.3 -1.0 1 17 -16 FEDERAL-MOGUL LLC / FEDERAL Consumer cyclical 0.9% 0.1% 0.8% 460 465 -5 3.9 4.2 -0.3 16 1 15

Source: Robeco High Yield Risk Monitor, data end of January 2018. Benchmark: Bloomberg Barclays US HY + Pan Euro HY 2.5% Issuer Cap (EUR), ex financials. Regional allocations are based on market weights, other tables are based on exposures. This example is for information purposes only and not intended to be an investment advice in any way

Robeco High Yield Bonds 30 Positioning: Beta

Historical Beta Robeco High Yield Bonds

1.3

1.2

1.1

1.0

0.9

0.8

0.7

Jun-11

Sep-11

Dec-11

Jun-17

Jun-13

Jun-15

Jun-12

Jun-14

Jun-16

Sep-17

Dec-17

Jun-10

Mar-11

Sep-13

Dec-13 Sep-15

Sep-12 Dec-15

Dec-12

Sep-14

Dec-14

Sep-16

Dec-16

Sep-10

Dec-10

Mar-17

Mar-13

Mar-15

Mar-12

Mar-14

Mar-16

Mar-10 Dec-09

Source: Robeco, Barclays POINT, data till end of January 2018

Robeco High Yield Bonds 31 Performance

Robeco High Yield Bonds 32 Performance recap of 2017

Strong year for Global High Yield Robeco High Yield Bonds fund > Index tightened by 60 bps, total return of 7.5% (USD) > Fund realized absolute gross performance of 6.7% (EUR), 9% (USD) and relative outperformance of +1.3% > EU HY > US HY, Financials > Corporates, BB’s outperformed B’s and CCC’s (risk-adjusted) > Biggest contributors to performance were overweight Financials, underweight Telecom and Energy > Biggest subtraction to performance was overweight Risk adjusted performance review 2017 Transportation and underweight Technology 90 80 > Overweight Europe vs underweight US contributed 80 72 68 68 positively 70 64 60 60 > High quality tilt in fund (overweight IG and BB) added 60 to our relative performance 50 46 41 38 40 40 35 > Winners: underweights in PetSmart, Frontier, Sprint, 30 iHeart, Windstream and overweight ArcelorMittal 20 > Losers: underweights in Valeant, Telecom Italia and 10 overweights in Lbrands and JCPenney

CCC

Excess return (bps) per 100 (DTS) 100 riskbps(bps)return per Excess

Financials

High Yield High Corporates

EUR USD

Source: Bloomberg, Robeco

Robeco High Yield Bonds 33 Bull / Bear market analysis

Robeco High Yield successful in all market circumstances > Quality bias delivers strong outperformance in bear markets > Tactical beta overlay helps to beat benchmark in bull markets > Positioned for turn in credit cycle

Spread analysis Excess return analysis 20% 20%

15% 15%

10% 10% 5% 5% 0%

-5% 0%

Annualized Total Returns since Q2 Q2 2001 since Returns Total Annualized Annualized Total Returns since Q2 Q2 2001 since Returns Total Annualized -10% Bull Market Neutral Bear Market Bull Market Bear Market -5% ER> 1.3% ER<-0.2%

Fund Index Fund Index

Source: Bloomberg Barclays, Robeco. Bull market: spread tightening. Bear market: spread widening. Source: Bloomberg Barclays, Robeco. Periods are equally distributed.

Robeco High Yield Bonds 34 Return expectations

Positive carry helps, even in tight spread environments > Start index < 400 bps, average yearly index return was 5.1% > HY does offer protection in a rising rate environment > Defaults are low, supported by low funding costs and corporate health

Index spread versus total return Default rates below average 18 20% 1000 16 15% 900 14 10% 800 12 10 5% 700 8

0% 600 6

2011

2017

2013

2015

2012

2014 2016

2010 4

2007

2003

2005 2002

-5% 2004 500

2006 2009 2008 2 -10% 400 0

-15% 300

Jul-13

Jul-16

Jul-10

Apr-11

Jul-07

Apr-17

Jul-04

Oct-15

Oct-12

Jan-12 Jan-15

Apr-14

Jan-18

Oct-03

Jan-03

Apr-05

Apr-02

Oct-06 Oct-09

Jan-06 Jan-09 -20% 200 Apr-08 GHY Global defaults Index Return Starting Index OAS (RHS)

Source: Bloomberg Barclays, Robeco Source: Bloomberg Barclays, Robeco

Robeco High Yield Bonds 35 Track Record: Excellent performance delivery

Annualized performance Robeco High Yield Bonds (hedged into EUR) 31-Jan-2018

YTD 1 Year 3 Year 5 Year 10 Year Since May-98 Robeco High Yield Bonds 0.21% 5.77% 6.93% 6.58% 8.54% 7.36%

Benchmark 0.41% 4.59% 4.95% 4.88% 7.09% 6.55% Relative performance -0.20% 1.18% 1.99% 1.71% 1.44% 0.81% Tracking error 0.59% 1.10% 0.98% 2.22% 2.42% Information ratio 1.99 1.80 1.74 0.65 0.34

Calendar year performance Robeco High Yield Bonds (hedged into EUR)

2017 2016 2015 2014 2013 2012 Robeco High Yield Bonds 6.70% 15.06% 0.21% 3.98% 8.22% 18.18%

Benchmark 5.42% 15.00% -4.36% 2.48% 7.47% 16.11% Relative performance 1.28% 0.06% 4.57% 1.50% 0.75% 2.07%

Source: Robeco. Robeco High Yield Bonds DH EUR share class, gross of fees, based on Net Asset Value, all figures in EUR In reality costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown. Benchmark: Bloomberg Barclays US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap (hedged into EUR) Periods shorter than one year are not annualized. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.

Robeco High Yield Bonds 36 Track Record: Excellent performance delivery

Annualized performance Robeco High Yield Bonds (hedged into USD) 31-Jan-2018

YTD 1 Year 3 Year 5 Year Since Feb-09 Robeco High Yield Bonds 0.41% 8.06% 8.33% 7.59% 13.20%

Benchmark 0.61% 6.67% 6.44% 5.88% 11.63% Relative performance -0.19% 1.39% 1.89% 1.71% 1.57% Tracking error 0.54% 1.06% 0.95% 1.29% Information ratio 2.57 1.79 1.79 1.22

Calendar year performance Robeco High Yield Bonds (hedged into USD)

2017 2016 2015 2014 2013 2012 Robeco High Yield Bonds 8.96% 16.66% 0.70% 4.24% 8.57% 18.60%

Benchmark 7.51% 16.81% -3.83% 2.75% 7.77% 16.71% Relative performance 1.46% -0.14% 4.53% 1.49% 0.80% 1.88%

Source: Robeco. Robeco High Yield Bonds IH USD share class, gross of fees, based on Net Asset Value, all figures in USD In reality costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown. Benchmark: Bloomberg Barclays US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap (hedged into USD) Periods shorter than one year are not annualized. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.

Robeco High Yield Bonds 37 Track Record: Excellent long term performance

Absolute Return 31-January-17 30% HY yields usually compensate 20% rate/spread widening: 10% > Except for 2008, all calendar years 0% positive total returns since inception -10% -20% -30%

Relative Return Outperforming benchmark consistently 4% > 2011: increasing allocation EUR HY, benefiting in 2012/13 3% 2% > 2014: Outperforming on underweight Energy and CCC; Overweight Europe 1% versus US 0% -1% > 2015: Outperforming on overweight European HY, underweight commodity -2% sectors, underweight CCC -3% > 2016: In-line performance achieved by active beta-timing during commodity downturn and Brexit Source: Robeco. Robeco High Yield Bonds DH EUR share class, gross of fees, based on Net Asset Value, all figures in EUR In reality costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown. > 2017: Overweight European HY + Fins Benchmark: Bloomberg Barclays US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap (hedged into EUR) Periods shorter than one year are not annualized. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.

Robeco High Yield Bonds 38 Performance Attribution: Robeco High Yield Bonds

Performance attribution 2017 Strong rally in spreads and declining yields > Outperformance on the back of overweight EU HY vs US HY Total 1.32% > Underweight in Energy- and overweight Financials contributed positively Issuer Selection 1.69% > Positioning in Transportation and Technology contributed negatively Beta -0.37% > Underweight CCC’s and B’s and overweight BB’s and IG contributed positively -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% Performance attribution 3-Year (annualized) Issuer selection contributing most Total 2.11% > Strong focus on issuer selection helped us to avoid significant price drops and defaults > Underweights in Pharma issuers & Energy sector and Issuer Selection 1.78% overweight Basic industries are positive contributors to performance Beta 0.33% > Underweight CCC’s and B’s contributed positively over a 3- year period 0.00% 0.50% 1.00% 1.50% 2.00% 2.50%

Source: Robeco. Robeco High Yield Bonds DH EUR share class, gross of fees, based on Net Asset Value, all figures in EUR. Data till end of December 2017. In reality costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown. Benchmark: Bloomberg Barclays US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap (hedged into EUR) Periods shorter than one year are not annualized. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.

Robeco High Yield Bonds 39 Key Takeaways

> Portfolio Managers High Yield working together for 14 years Experienced & > Clear split in responsibilities between Portfolio Managers and Credit Analysts Stable Credit Team > Credit team (9 PMs and 23 analysts) with on average 17 years industry experience

> Structural bias to higher quality names, strong underweight in CCCs Exploiting > Wining by not losing Inefficiencies > Long term investment approach, managing through market cycles

> Investment philosophy based on empirical research by Robeco Distinguishing > Risk points (DTS) used as basis for portfolio construction > Multi-Factor Model used to capture small-/mid-caps liquidity premium

Robeco High Yield Bonds 40 Appendix

Robeco High Yield Bonds 41 Robeco Global High Yield Bonds: Fund characteristics

Characteristics Fund Benchmark Difference Yield to Worst 4.4% 5.4% -1.0% Yield to Maturity 4.5% 5.5% -1.1% Yield (hedged to EUR) 2.9% 3.6% -0.7% Yield (hedged to USD) 5.2% 5.8% -0.7% Yield (hedged to GBP) 3.8% 4.5% -0.7% Yield (hedged to AUD) 5.3% 5.9% -0.7% Interest rate duration (OAD in years) 3.8 3.9 -0.1 Spread duration (OASD in years) 4.3 3.9 0.4 Credit spread (OAS in bps) 252 314 -63 Coupon 4.8% 6.0% -1.2% DTS beta 0.87 1.00 Issuers 320 1,053 Average rating BA1/BA2 BA3/B1

Source: Robeco, Barclays POINT, data end of January 2018. Fund is Robeco High Yield Bonds fund. Benchmark: Bloomberg Barclays US HY + Pan Euro HY 2.5% Issuer Cap (EUR), ex financials. This example is for information purposes only and not intended to be an investment advice in any way

Robeco High Yield Bonds 42 Robeco Global High Yield Bonds: Fund characteristics

Fund characteristics Name Robeco High Yield Bonds Fund Managers Sander Bus & Roeland Moraal Assets under Management EUR 8.75 billion (end of January 2018) Inception May 1998 Universe US and pan-European High Yield (excluding emerging markets) Reference index Bloomberg Barclays US HY + Pan Euro HY 2.5% Issuer Cap (EUR), ex financials Ex-ante tracking error Maximum 5% Institutional share classes IEH distributing (EUR hedged: LU0779184851); (USD hedged: LU0716562250) IH accumulating (EUR hedged: LU0227757233); (USD hedged: LU0398248921) 0IH accumulating, zero duration (EUR hedged: LU0570123827); (USD hedged: LU0579622084) Retail share classes Distributing, EUR hedged (BH, quarterly: LU0454740118); (EH, annually: LU0243182812) DH accumulating (EUR hedged: LU0085136942); (USD hedged: LU0594695099); (CHF hedged: LU0677789876) 0DH accumulating, zero duration (EUR hedged: LU0545439217); (USD hedged; LU0594695172) 0EH distributing, zero duration (EUR hedged: LU0606904307) Legal status Investment company with variable capital incorporated under Luxembourg law UCITS IV Yes Management fee 1.00% (retail); 0.50% (institutional) Service fee 0.12% (retail); 0.08% (institutional) Total expense ratio Ca. 1.17%-1.20% (retail); 0.59%-0.63% (institutional)

Source: Robeco. Note: Above mentioned risk limits are internal guidelines. Limits mentioned in the prospectus are leading.

Robeco High Yield Bonds 43 Important information

Important Information Investment involves risks. Before investing, please note the initial capital is not guaranteed. The value Robeco Institutional Asset Management B.V. has a license as manager of Undertakings for Collective of the investments may fluctuate. Past performance is no guarantee of future results. Investors should Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs) (“Fund(s)”) from ensure that they fully understand the risk associated with the Fund. Investors should also consider their the Netherlands Authority for the Financial Markets in Amsterdam. This document is solely intended for own investment objective and risk tolerance level. The information in this material may contain professional investors, defined as investors which qualify as professional clients, have requested to be projections or other forward-looking statements regarding future events, targets, management treated as professional clients or are authorized to receive such information under any applicable laws. discipline or other expectations which involve assumptions, risks, and uncertainties and is only as Therefore, the information set forth herein is not addressed and must not be made available, in whole current as of the date indicated. Based on this, there is no assurance that such events will occur, and or in part, to other parties, such as retail clients. Robeco Institutional Asset Management B.V and/or its may be significantly different than that shown here, and Robeco cannot guarantee that these statistics related, affiliated and subsidiary companies, (“Robeco”), will not be liable for any direct, indirect, and the assumptions derived from the statistics will reflect the market conditions that may be special, incidental or consequential damages arising out of the use of any opinion or information encountered or future performances. Historical returns are provided for illustrative purposes only. The expressly or implicitly contained in this publication. The content of this document is based upon sources price of units may go down as well as up and the past performance is not indicative of future of information believed to be reliable. Without further explanation this document cannot be considered performance. If the currency in which the past performance is displayed differs from the currency of the complete. It is intended to provide the professional investor with general information on Robeco’s country in which you reside, then you should be aware that due to exchange rate fluctuations the specific capabilities, but does not constitute a recommendation or an advice to buy or sell certain performance shown may increase or decrease if converted into your local currency. The performance securities or investment products and/or to adopt any investment strategy. Nothing in this material data do not take account of the commissions and costs incurred on the issue and redemption of units. constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal The prices used for the performance figures of the Luxembourg-based Funds are the end-of-month recommendation to you. Any opinions, estimates or forecasts may be changed at any time without transaction prices net of fees up to 4 August2010. From 4 August 2010, the transaction prices net of prior warning. If in doubt, please seek independent advice. All rights relating to the information in this fees will be those of the first business day of the month. Return figures versus the benchmark show the document are and will remain the property of Robeco. This material may not be copied or used with investment management result before management and/or performance fees; the Fund returns are the public. No part of this document may be reproduced, saved in an automated data file or published with dividends reinvested and based on net asset values with prices and exchange rates of the in any form or by any means, either electronically, mechanically, by photocopy, recording or in any valuation moment of the benchmark. Please refer to the prospectus of the Funds for further details. other way, without Robeco's prior written permission. Performance is quoted net of investment management fees. The ongoing charges mentioned in this document is the one stated in the Fund's latest annual report at closing date of the last calendar year. The material and information in this document are provided "as is" and without warranties of any kind, either expressed or implied. Robeco and its related, affiliated and subsidiary companies disclaim all This document is not directed to, or intended for distribution to or use by, any person or entity who is a warranties, expressed or implied, including, but not limited to, implied warranties of merchantability citizen or resident of or located in any locality, state, country or other jurisdiction, such as US Persons, and fitness for a particular purpose. where such distribution, document, availability or use would be contrary to law or regulation or which would subject the Fund and its investment manager to any registration or licensing requirement within such jurisdiction. Any decision to subscribe for interests in the Fund must be made solely on the basis of information contained in the prospectus which information may be different from the information contained in this document. The information contained in this document is qualified in its entirety by reference to the prospectus, and this document should, at all times, be read in conjunction with the prospectus. The prospectus and the Key Investor Information Document for the Robeco Funds can all be obtained free of charge at www.robeco.com.

Robeco High Yield Bonds 44 Important information

Additional Information for US offshore investors Additional Information for investors with residence or seat in Canada The Robeco Capital Growth Funds have not been registered under the United States Investment This presentation may not be circulated or distributed to persons in Canada except to persons in those Company Act of 1940, as amended, nor the United States Securities Act of 1933, as amended. None of jurisdictions and to those persons where and to whom they may lawfully be offered for sale, and the shares may be offered or sold, directly or indirectly in the United States or to any US Person. A US therein only by persons permitted to sell such securities. This document is not, and under no Person is defined as (a) any individual who is a citizen or resident of the United States for federal circumstances is to be construed as, a prospectus, an advertisement or a public offering of the income tax purposes; (b) a corporation, partnership or other entity created or organized under the securities described herein in Canada. No securities commission or similar authority in Canada has laws of or existing in the United States; (c) an estate or trust the income of which is subject to United reviewed or in any way passed upon this document or the merits of the securities described herein, and States federal income tax regardless of whether such income is effectively connected with a United any representation to the contrary is an offence. Robeco Institutional Asset Management B.V. is relying States trade or business. on the international dealer and international adviser exemption in Quebec and has appointed McCarthy Tétrault LLP as its agent for service in Quebec. Additional Information for investors with residence or seat in Australia This document is distributed in Australia by Robeco Hong Kong Limited (ARBN 156 512 659) (‘Robeco’) Additional Information for investors with residence or seat in Colombia which is exempt from the requirement to hold an Australian financial services license under the This document does not constitute a public offer in the Republic of Colombia. The offer of the Fund is Corporations Act 2001 (Cth) pursuant to ASIC Class Order 03/1103. Robeco is regulated by the addressed to less than one hundred specifically identified investors. The Fund may not be promoted or Securities and Futures Commission under the laws of Hong Kong and those laws may differ from marketed in Colombia or to Colombian residents, unless such promotion and marketing is made in Australian laws. This document is distributed only to “wholesale clients” as that term is defined under compliance with Decree 2555 of 2010 and other applicable rules and regulations related to the the Corporations Act 2001 (Cth). This document is not for distribution or dissemination, directly or promotion of foreign Funds in Colombia. The distribution of this document and the offering of shares indirectly, to any other class of persons. In New Zealand, this document is only available to wholesale may be restricted in certain jurisdictions. Prospective applicants for the Fund should inform themselves investors within the meaning of clause 3(2) of Schedule 1 of the Financial Markets Conduct Act 2013 of any applicable legal requirements, exchange control regulations and applicable taxes in the (‘FMCA’). This document is not for public distribution in Australia and New Zealand. countries of their respective citizenship, residence or domicile.

Additional Information for investors with residence or seat in Austria Additional Information for investors with residence or seat in France This information is solely intended for professional investors or eligible counterparties in the meaning Robeco is having the freedom to provide services in France. Robeco France (only authorized to offer of the Austrian Securities Oversight Act. investment advice service to professional investors) has been approved under registry number 10683 by the French prudential control and resolution authority (formerly ACP, now the ACPR) as an Additional Information for investors with residence or seat in Brazil investment firm since 28 September 2012. The Fund may not be offered or sold to the public in Brazil. Accordingly, the Fund has not been nor will be registered with the Brazilian Securities Commission - CVM nor have they been submitted to the Additional Information for investors with residence or seat in Germany foregoing agency for approval. Documents relating to the Fund, as well as the information contained This information is solely intended for professional investors or eligible counterparties in the meaning therein, may not be supplied to the public in Brazil, as the offering of the Fund is not a public offering of of the German Securities Trading Act. securities in Brazil, nor used in connection with any offer for subscription or sale of securities to the public in Brazil.

Additional Information for investors with residence or seat in the Dubai International Financial Centre (DIFC), United Arab Emirates This material is being distributed by Robeco Institutional Asset Management B.V. (Dubai Office) located at Office 209, Level 2, Gate Village Building 7, Dubai International Financial Centre, Dubai, PO Box 482060, UAE. Robeco Institutional Asset Management B.V. (Dubai office) is regulated by the Dubai Financial Services Authority (“DFSA”) and only deals with Professional Clients or Market Counterparties and does not deal with Retail Clients as defined by the DFSA.

Robeco High Yield Bonds 45 Important information

Additional Information for investors with residence or seat in Hong Kong Additional Information for investors with residence or seat in Shanghai Investment returns not denominated in HKD/USD are exposed to exchange rate fluctuations. Investors This material is prepared by Robeco Investment Management Advisory (Shanghai) Limited Company should refer to the Hong Kong prospectus before making any investment decision. This Fund may use (‘Robeco Shanghai’) and is only provided to the specific objects under the premise of confidentiality. derivatives as part of its investment strategy and such investments are inherently volatile and this Fund This material must not be wholly or partially reproduced, distributed, circulated, disseminated, could potentially be exposed to additional risk and cost should the market move against it. Investors published or disclosed, in any form and for any purpose, to any third party without prior approval from should note that the investment strategy and risks inherent to the Fund are not typically encountered in Robeco Shanghai. The information contained herein may not reflect the latest information on account traditional equity long only Funds. In extreme market conditions, the Fund may be faced with of the changes and Robeco Shanghai is not responsible for the updating of the material or the theoretically unlimited losses. The contents of this document have not been reviewed by the Securities correction of inaccurate or missing information contained in the material. Robeco Shanghai has not yet and Futures Commission (“SFC”) in Hong Kong. . If you are in any doubt about any of the contents of been registered as the private fund manager with the Asset Management Association of China. Robeco this document, you should obtain independent professional advice. This document has been distributed Shanghai is a wholly foreign-owned enterprise established in accordance with the PRC laws, which by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong. If you are in enjoys independent civil rights and civil obligations. The statements of the shareholders or affiliates in any doubt about any of the contents of this document, you should obtain independent professional the material shall not be deemed to a promise or guarantee of the shareholders or affiliates of Robeco advice. Shanghai, or be deemed to any obligations or liabilities imposed to the shareholders or affiliates of Robeco Shanghai. Additional Information for investors with residence or seat in Italy This document is considered for use solely by qualified investors and private professional clients (as Additional Information for investors with residence or seat in Spain defined in Article 26 (1) (b) and (d) of Consob Regulation No. 16190 dated 29 October 2007). If made The Spanish branch Robeco Institutional Asset Management BV, Sucursal en España, having its available to Distributors and individuals authorized by Distributors to conduct promotion and marketing registered office at Paseo de la Castellana 42, 28046 Madrid, is registered with the Spanish Authority activity, it may only be used for the purpose for which it was conceived. for the Financial Markets (CNMV) in Spain under registry number 24. The data and information contained in this document may not be used for communications with Supervisory Authorities. This document does not include any information to determine, in concrete Additional Information for investors with residence or seat in Switzerland terms, the investment inclination and, therefore, this document can not and should not be the basis for This document is exclusively distributed in Switzerland to qualified investors as such terms are defined making any investment decisions. under in the Swiss Collective Investment Schemes Act (CISA) by Robeco Switzerland AG which is authorized by the Swiss Financial Market Supervisory Authority FINMA as Swiss representative of foreign Additional Information for investors with residence or seat in Panama collective investment schemes, and UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal The distribution of this Fund and the offering of shares may be restricted in certain jurisdictions. The address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, as Swiss paying agent. The prospectus, the key above information is for general guidance only, and it is the responsibility of any person or persons in investor information documents (KIIDs), the articles of association, the annual and semi-annual reports possession of the prospectus of the Fund and wishing to make application for shares to inform of the Fund(s), as well as the list of the purchases and sales which the Fund(s) has undertaken during themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. the financial year, may be obtained, on simple request and free of charge, at the head office of the Prospective applicants for shares should inform themselves as to legal requirements also applying and Swiss representative Robeco Switzerland AG, Josefstrasse 218, CH-8005 Zurich. The prospectuses are any applicable exchange control regulations and applicable taxes in the countries of their respective also available at the company’s offices or via the website www.robeco.ch website. citizenship, residence or domicile. Additional Information for investors with residence or seat in United Arab Emirates Additional Information for investors with residence or seat in Peru Some Funds referred to in this marketing material have been registered with the UAE Securities and The Fund has not been registered before the Superintendencia del Mercado de Valores (SMV) and are Commodities Authority (the Authority). Details of all Registered Funds can be found on the Authority’s being placed by means of a private offer. SMV has not reviewed the information provided to the website. The Authority assumes no liability for the accuracy of the information set out in this investor. This document is only for the exclusive use of institutional investors in Peru and is not for material/document, nor for the failure of any persons engaged in the investment Fund in performing public distribution. their duties and responsibilities.

Robeco High Yield Bonds 46 Important information

Additional Information for investors with residence or seat in Singapore The Sub-Funds may only be promoted exclusively to persons who are sufficiently experienced and This document has not been registered with the Monetary Authority of Singapore (“MAS”). Accordingly, sophisticated to understand the risks involved in investing in such schemes, and who satisfy certain this document may not be circulated or distributed directly or indirectly to persons in Singapore other other criteria provided under Section 304, Section 305 or any other applicable provision of the SFA and than (i) to an institutional investor under Section 304 of the SFA, (ii) to a relevant person pursuant to the subsidiary legislation enacted thereunder. You should consider carefully whether the investment is Section 305(1), or any person pursuant to Section 305(2), and in accordance with the conditions suitable for you. Singapore Private Limited holds a capital markets services licence for fund specified in Section 305, of the SFA, or (iii) otherwise pursuant to, and in accordance with the management issued by the MAS and is subject to certain clientele restrictions under such licence. An conditions of, any other applicable provision of the SFA. The contents of this document have not been investment will involve a high degree of risk, and you should consider carefully whether an investment reviewed by the MAS. This document is not intended as a recommendation or for the purpose of is suitable for you. soliciting any action in relation to Robeco Capital Growth Funds or other Robeco Funds and should not be construed as an offer to sell shares of the Fund (“Shares”) or solicitation by anyone in any Additional Information for investors with residence or seat in the United Kingdom jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is Robeco is subject to limited regulation in the UK by the Financial Conduct Authority. Details about the unlawful to make such an offer and solicitation. Any decision to subscribe for interests in the Fund must extent of our regulation by the Financial Conduct Authority are available from us on request. be made solely on the basis of information contained in the prospectus (“Prospectus”), which information may be different from the information contained in this document, and with independent Additional Information for investors with residence or seat in Uruguay analyses of your investment and financial situation and objectives. The information contained in this The sale of the Fund qualifies as a private placement pursuant to section 2 of Uruguayan law 18,627. document is qualified in its entirety by reference to the Prospectus, and this document should, at all The Fund must not be offered or sold to the public in Uruguay, except in circumstances which do not times, be read in conjunction with the Prospectus. Detailed information on the Fund and associated constitute a public offering or distribution under Uruguayan laws and regulations. The Fund is not and risks is contained in the Prospectus. Any decision to participate in the Fund should be made only after will not be registered with the Financial Services Superintendency of the Central Bank of Uruguay. The reviewing the sections regarding investment considerations, conflicts of interest, risk factors and the Fund corresponds to investment Funds that are not investment Funds regulated by Uruguayan law relevant Singapore selling restrictions (as described in the section entitled “Important Information for 16,774 dated September 27, 1996, as amended. Singapore Investors”) contained in the Prospectus. You should consult your professional adviser if you are in doubt about the stringent restrictions applicable to the use of this document, regulatory status of the Fund, applicable regulatory protection, associated risks and suitability of the Fund to your objectives. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject the Fund and its investment manager to any registration or licensing requirement within such jurisdiction. Investors should note that only the sub-funds listed in the appendix to the section entitled “Important Information for Singapore Investors” of the Prospectus (“Sub-Funds”) are available to Singapore investors. The Sub-Funds are notified as restricted foreign schemes under the Securities and Futures Act, Chapter 289 of Singapore (“SFA”) and are invoking the exemptions from compliance with prospectus registration requirements pursuant to the exemptions under Section 304 and Section 305 of the SFA. The Sub-Funds are not authorized or recognized by the Monetary Authority of Singapore and Shares in the Sub-Funds are not allowed to be offered to the retail public in Singapore. The Prospectus of the Fund is not a prospectus as defined in the SFA. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply.

Version 11/17

Robeco High Yield Bonds 47