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Credits Investing Insights

Fixed Income Quarterly Outlook: From negative policy rates to yield curve control - what’s next?

17-10-2016 | Insight | Kommer van Trigt, Paul van der Worp, Stephan van IJzendoorn

The low growth, low inflation state of the global economy is a favorable macro environment for fixed income investments. In such a world the Fed is not likely to normalize official target rates aggressively. Meanwhile the Bank of Japan comes up with another novelty from its seemingly inexhaustible toolbox: yield curve control.

Volatility sticks to the script in September

13-10-2016 | Insight | Lukas Daalder

Markets wake up from summer slumber

Finding the best picks in high yield bonds

11-10-2016 | Insight | Sander Bus

The high yield bonds market offers a unique set of opportunities in an environment of low interest rates, but you need to know where to look, says portfolio manager Sander Bus.

The quarterly outlook for credits: I buy when you buy

06-10-2016 | Outlook | Sander Bus, Victor Verberk

Fundamentals have deteriorated and credit valuations are not very appealing either. But that does not matter anymore. There is only one trade and that is the Central Bank. Although we would rather be underweight risk, this very strong technical support keeps us neutrally positioned.

Benefiting from the Value factor in a fundamental credit strategy

04-10-2016 | Insight | Reinout Schapers, Victor Verberk

Value investing has been researched extensively in equity markets and has recently been shown to exist in credit markets as well. In our fundamental Global Credits strategy, the Value factor also plays an important role. Here we look for cheap stocks with strong mean reversion potential.

The debt supercycle also means growing wealth

26-09-2016 | Outlook | Lukas Daalder

Debt gets a bad rap, creating images of human figures bound in chains… but is it really that bad? It is a lot more complex than that, says asset allocator and debt investor Lukas Daalder in his analysis of the thorny subject for Robeco’s new five-year outlook.

Good times for investment grade corporates

15-09-2016 | Insight | Peter Kwaak

The ECB’s corporate sector purchase program has given investment grade corporate bonds a huge boost. Moreover, growth in ‘corporate hybrids’ and ‘reverse Yankees’ offers attractive yield pick-up opportunities.

Banks’ risk culture and its impact on credits

13-09-2016 | Insight | Taeke Wiersma, Christopher Greenwald

After the credit crisis, the importance of proper risk management at banks has become indisputable. In 2015, RobecoSAM incorporated a new question on banks’ risk culture in its yearly Corporate Sustainability Assessment. This information has a direct impact on Robeco’s credit investment decisions.

Avoiding unpleasant surprises: country risk in telecom credits

07-09-2016 | Insight | Jankees Ruizeveld, Mattias Müller

For many telecom companies, expanding into emerging countries can be very attractive. However, the telecom sector is highly exposed to country governance risk, such as changing regulations and bribery. For credits issued by telecom companies we assess this risk in a structured way to make better-informed investment decisions.

Opportunities in Investment Grade

05-09-2016 | Insight | Peter Kwaak

Peter Kwaak discusses the effects of the ECB programme on credit markets. He sees opportunities for his Investment Grade Corporate Bonds fund.

Emerging Debt fund celebrates five years of outperformance

02-08-2016 | Insight | Paul Murray-John

A renaissance for emerging markets on the back of a weaker US dollar is proving a very happy birthday for Robeco’s Emerging Debt fund.

Lower liquidity, collective responsibility

28-07-2016 | Insight | Robbert Vonk

The financial industry needs to collectively deal with lower liquidity in bond markets, says Robeco’s head of risk analysis.

Fixed Income Quarterly Outlook: yield drought & bond scarcity

19-07-2016 | Insight | Kommer van Trigt, Paul van der Worp, Stephan van IJzendoorn

The world economy is marked by sluggish growth and absent price pressure. Despite unprecedented monetary easing, inflation expectations have declined further. Bond yields have set new historical lows and can continue to do so. Central bank buying programs add to the picture as bond scarcity in core government markets increases downward pressure on interest rates.

Multi-factor fund celebrates birthday with outperformance

18-07-2016 | Insight | Patrick Houweling, PhD

“Putting your research to the test is always exciting, and if it then works out well, then that’s very satisfying.” That’s how Patrick Houweling describes celebrating the first anniversary of the Global Multi-Factor Credits fund, with an outperformance chart to go with the birthday cake.

The quarterly outlook for credits: remortgaging shareholder equity

05-07-2016 | Outlook | Sander Bus, Victor Verberk

American companies are levering up and central banks are providing ever cheaper money. With increasing debt, markets are becoming more vulnerable to volatility. We pursue a guerrilla strategy, adopting a neutral starting point and taking tactical positions where value pops up due to excessive fear. We start with a higher beta driven by the Brexit spread premium.

Mid-term outlook depends on any Brexit domino effect

29-06-2016 | Insight | Lukas Daalder

The mid-term outlook for investors depends on whether the Brexit either unifies or further breaks up the European Union in a domino effect, says Lukas Daalder.

Financial markets get a ‘nasty surprise’ from Brexit vote

24-06-2016 | Insight | Kommer van Trigt, Lukas Daalder, Mark Glazener, Sander Bus, Victor Verberk

Markets got the biggest shock from the Brexit vote since the financial crisis of 2008 and now face months of uncertainty, say Robeco’s portfolio managers for the major asset classes.

Brexit impact on Robeco Financial Institutions Bonds

24-06-2016 | Insight | Jan Willem de Moor

The Robeco Financial Institutions Bonds fund invests mainly in subordinated financial. The market for subordinated financials opened lower this morning, in line with other risky assets like equity. Throughout the morning prices started to recover a bit and we have seen buyers in the market. Market weakness was well spread, though obviously UK names underperformed.

Implementing factor strategies in corporate bonds

14-06-2016 | Insight | Patrick Houweling, PhD

Research shows that factor investing strategies work well in corporate bonds, but actually building a portfolio requires greater care due to liquidity issues, Robeco’s quantitative experts argue in a new white paper.

Dare to be contrarian with Robeco Global Credits

12-05-2016 | Insight | Victor Verberk

Victor Verberk is bracing himself for more market volatility for corporate bonds. As a bond investor, he is also a risk manager, and there is no shortage of risks at the moment. "But as active research-driven bond pickers, we love this market." The analysts at Morningstar gave his contrarian investment style a Bronze rating.

Robeco Global Credits: We know where to find Alpha

10-05-2016 | Insight | Victor Verberk

Victor Verberk explains why being contrarian is vital in the later stages of the global credits cycle.

The quarterly outlook for credits: we are on borrowed time

04-04-2016 | Outlook | Sander Bus, Victor Verberk

How much further can the US business cycle be extended? After seven years of economic expansion, profitability and leverage, data suggest that the end of this cycle is nearing.

Four unjustified stress factors for high yield bonds

14-03-2016 | Insight | Sander Bus

Investors in high yield bonds should be careful that they do not get carried away by the unpredictable sentiment on financial markets. Sander Bus, Robeco High Yield Bonds portfolio manager, puts this investment category into perspective and looks ahead. "There certainly are investment opportunities among high yield corporate bonds, but it remains important to be selective."

ECB stimulus is ‘clever move’ to boost bank lending

10-03-2016 | Insight | Léon Cornelissen

The European Central Bank’s latest stimulus package is a clever move to boost bank lending that was welcomed by markets, says Chief Economist Léon Cornelissen.

High yield remains our preferred risky asset

09-03-2016 | Insight | Lukas Daalder

February was a month with two faces. The first part of the month was terrible for risky assets. At a certain moment it felt like we were reliving the financial crisis of 2008.

Brexit fears in credit markets 'are overblown'

01-03-2016 | Insight | Victor Verberk

Fears that the credit markets will be adversely affected much further by a Brexit are overblown, or at least have been priced in to a certain extent, as fundamentals are unchanged, says portfolio manager Victor Verberk.

Keep your nerve in high yield!

11-02-2016 | Insight | Sander Bus

Keep your nerve – and you will be rewarded in high yield bonds. That’s the core message from portfolio manager Sander Bus as macroeconomic fears continue to wobble the market.

The rationale of a total return approach in bonds

05-02-2016 | Interview | Kommer van Trigt

When achieving maximized risk-adjusted returns, the Robeco Global Total Return Bond Fund offers the right combination of a global universe, a flexible investment style and no benchmark constraints.

Buying opportunities arise in volatile high yield market

27-01-2016 | Insight | Sander Bus

The turmoil in financial markets sparked by Chinese growth concerns and the associated decline in commodity prices is causing investors to worry about the high yield credit market.

Thirteen things that could move markets in 2016

13-01-2016 | Outlook | Lukas Daalder

The annual predictions season officially kicked off the moment we tore the last page off our 2015 calendar. Anything from simply making future projections based on existing movements and trends to coming up with top-of-your-head ideas for ‘black swans’ – unexpected events that could have a major impact.

The quarterly outlook for credits: zombies or creative destruction

22-12-2015 | Insight | Victor Verberk

Credit growth in China and Quantitative Easing (QE) in the US, Europe and Japan were medicines that worked for a while. Cheap money kept zombie businesses afloat and prevented creative destruction. However, the commodity cycle has rolled over and the credit cycle is proceeding. Funding pressure is increasing, the US credit market is full of animal spirits and volatility is back.

IPE webinar: Factor investing works for credits too

16-12-2015 | Insight | Patrick Houweling, PhD

Watch our webcast in which Patrick Houweling and Jeroen van Zundert discuss this approach to investing in credits.

Factor Investing in the Corporate Bond Market

11-12-2015 | Research | Jeroen van Zundert, Patrick Houweling, PhD

We provide empirical evidence that the Size, Low-Risk, Value and Momentum factors have significant risk-adjusted returns in the corporate bond market. By combining these factors in a multi-factor portfolio, drawdowns and tracking error vs. the market are reduced, while the higher return and Sharpe ratio are preserved.

Global approach increasingly important for bonds

17-11-2015 | Insight | Kommer van Trigt

Flexibility is important. Don't get tied down. Keep searching for attractive yields, be selective and make sure you are rewarded for the risk you take. That is the mantra for bond investors in 2016.

Factor investing for credits: from research paper to fund

24-07-2015 | Insight | Patrick Houweling, PhD

Most academic studies on factor investing are about equities. Patrick Houweling and Jeroen van Zundert show that factor investing also works for bonds. How has their research paper been used to create a fund?

Balanced exposure to factors in credits

23-07-2015 | Patrick Houweling, PhD

Robeco Global Multi-Factor Credits, launched on June 15, 2015, is an innovative fund offering balanced exposure to the Low-Risk, Value, Momentum and Size factors in the credit market.

Robeco Global Credits

15-07-2015 | Insight | Victor Verberk

Victor Verberk, portfoliomanager on the opportunities of credit investing. Flexible, successful, and genuinely worldwide.

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