For many investors, global developed market equities are a core allocation. They provide broad access to some of the world’s largest and most established companies and often form the foundation of long-term equity portfolios. But broad index exposure is not necessarily neutral. Most equity indices weight companies according to their market capitalization. As companies become larger, they automatically take up more space in the index. The index does not ask whether a company still looks attractively valued, whether its fundamentals are improving or whether its sustainability risks are being managed well. It simply follows its rules.

That is where enhanced indexing comes in. The strategy starts with the benchmark as the reference point, then makes many small active decisions around it. The goal is to keep the broad characteristics investors expect from a core global equity allocation, while using research-driven stock selection to seek better outcomes over time.

Academic research has long shown that certain company characteristics, also referred to as factors, such as value, quality and momentum, have been associated with return differences over time. These factors form the foundation of many systematic approaches, including enhanced indexing. Yet these factor rewards are not constant. Some periods are more supportive than others, and simple factor definitions can lose effectiveness as markets evolve.

For investors, the point is that systematic stock selection needs to be diversified, research-based and continually refined. A robust process should ask several questions at once: does the stock look attractively valued? Is the business financially strong? Is the price trend supportive? Are analysts becoming more positive? Are short-term signals improving or deteriorating?

Robeco’s 3D Global Equity UCITS ETF, based on our Global Developed Enhanced Index Equities strategy, uses a proprietary stock selection model that combines several groups of signals: value, quality, momentum, analyst revisions and short-term signals. Each provides a different perspective on a company’s potential return. The low correlation across these factors, as seen in Figure 1, supports genuine diversification.² This means that returns are not driven by a single common source. Different factors tend to outperform at different points in the cycle, helping to smooth the overall return profile.

Importantly, the factors used in the strategy are based on Robeco’s own definitions, developed through long-term quantitative research, practical implementation experience and continuous testing across markets and periods.

That distinction is important because a generic value factor, for example, may simply compare cheap stocks with expensive stocks. A proprietary definition can be more refined: adjusting for sector effects, accounting for risk, avoiding value traps, reducing unnecessary turnover or combining several related indicators. The same principle applies to other factors.

Historical analysis of Robeco’s Enhanced Indexing strategies suggests that a meaningful part of realized relative performance has not been explained by generic academic factor exposure alone. In other words, the added value has not only come from using well-known factors, but also from how those factors are defined, combined and implemented, with a wide array of underlying signals being used to develop a score for each of them.

This is central to the Global 3D story. The strategy is systematic, but not generic. It seeks to capture return opportunities through Robeco’s own research, while remaining close enough to the benchmark to serve as a core global equity allocation.

Systematic investing is sometimes seen as mechanical. But while the investment process is rule-based, the research behind those rules continues to develop. Markets change, data improves and signals can become more or less effective over time.

Robeco’s researchers and portfolio managers continually review and refine the model. This can involve improving existing signal definitions, incorporating new types of data, testing whether signals remain effective and assessing how they interact with risk, sustainability and implementation costs.

The chart illustrates how the current model differs from earlier iterations. It’s important to note that change is not made for its own sake but rather that a quantitative process needs to evolve as markets evolve. For investors, this matters because the strategy is not simply applying a fixed set of rules developed years ago. It is backed by an ongoing research process designed to keep the model relevant.

Traditional portfolio construction often focuses on two dimensions: expected return and risk. Robeco’s 3D approach adds a third dimension: sustainability. In the Robeco 3D Global Equity UCITS ETF, return potential, benchmark-relative risk and sustainability metrics⁴ are integrated directly into the portfolio construction process.

Why does this matter? Because the objectives can interact. A portfolio designed only to maximize expected return could take too much active risk. A portfolio designed only to improve sustainability could create unintended sector, country or style biases. A portfolio designed only to minimize benchmark deviation might not make enough active choices to add value. The 3D framework seeks to balance these trade-offs. The strategy aims to identify attractive stocks, manage active risk and systematically consider financially material ESG risks⁵ in portfolio construction alongside benchmark constraints.

Sustainability is therefore not treated as a separate overlay after the portfolio has been built, but instead considered alongside return and risk from the beginning. Companies’ exposure to sustainability risks and opportunities can matter for long-term performance, and a disciplined investment process should take those risks into account. The objective is to integrate that third dimension without compromising the role of the ETF as a broad, benchmark-aware global equity allocation.

Although the ETF’s track record is still short, the strategy builds on Robeco’s broader enhanced-indexing capability, which has been developed over more than 20 years. The early performance record shows how the approach has so far translated into positive gross excess returns versus the benchmark, while remaining within a benchmark-aware framework.

1. Core global equity exposure, actively enhanced
   The ETF gives investors broad developed-market global equity exposure in a transparent and flexible active ETF wrapper, but with more than simple market-cap-weighted access.
   

2. Proprietary stock selection
   Stock selection is based on long-term research, continuous testing and multiple proprietary signals, including value, quality, momentum, analyst revisions and short-term signals.
   

3. Optimized 3D portfolio construction
   The strategy targets excess return while managing risk and integrating sustainability in a disciplined, pragmatic way.
   

For investors seeking developed-market global equity exposure, the Robeco 3D Global Equity UCITS ETF offers a systematic, research-driven alternative to passive investing: broad enough for the core, but selective enough to look beyond the index.