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Robeco Euro Government Bonds IH USD

Index: Bloomberg Barclays Euro Aggregate: Treasury (hedged into USD)
ISIN: LU1218873120
  • Outspoken active and adaptive approach
  • Country allocation main performance driver
  • Active duration and yield curve positioning
Asset class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

Robeco Euro Government Bonds is an actively managed fund that invests only in euro-denominated government bonds. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.The fund invests in euro denominated bonds issued by the EMU-member countries. It employs an investment process combining top-down and bottom-up elements. Fundamental analysis is performed on each of the three performance drivers: country allocation, duration (interest rate sensitivity) management and yield curve positioning. Country ESG scores are part of our bottom-up analysis.

Price development

No performance data available

Price development

Robeco Euro Government Bonds IH USD

Performance

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The value of the investments may fluctuate. Past performance is no guarantee of future results.
Annualized (for periods longer than one year).
Cumulized (total amount of return).
Performances are gross of fees and based on closing values. In reality, costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown.

Performances are net of fees and based on transaction prices.
Fund Reference index
The value of the investments may fluctuate. Past performance is no guarantee of future results.
Annualized (for periods longer than one year).
Cumulized (total amount of return).
Performances are gross of fees and based on closing values. In reality, costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown.

Performances are net of fees and based on transaction prices.

Performance explanation

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Based on transaction prices, the fund's return was 1.70%. The return of the fund was significantly positive, as yields declined and the curve flattened. Bunds extended the rally into July, even as economies reopen and growth and inflation are currently accelerating. The underweight duration position and the 2-5 steepener had a detrimental impact on returns. Even so, the fact that the underweight was reduced did help to mitigate some of the adverse effect of declining yields. In addition, the fact that the portfolio had moved the bulk of the underweight from Euro rates into UK rates contributed. Gilts lagged the broader rally in Bunds. Moreover, inflation-linked bonds added to performance as breakeven rates widened, supported by dovish ECB guidance. However, exposure to government-related issuers detracted from performance, as spreads widened.

Statistics

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Market development

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Bunds rallied significantly in July, as concerns over the return of the virus in the form of the delta variant and a dovish July ECB governing council meeting benefited valuations. The ECB now needs to forecast inflation at 2% well ahead of the forecast horizon before lifting rates. The current inflation outlook is still quite some distance away from this threshold. Nonetheless, the ECB left the discussion regarding the size of monthly purchases under its PEPP program for the September meeting. ECB asset purchases are the key policy tool and a decision around tapering is likely to adversely affect the outright level of rates, but could also impact country spreads. However, BTPs found some support from an improving growth outlook. Even so, this growth optimism was offset by concerns around a flare-up of the pandemic and uncertainty around the future path of QE purchases. Hence, the 10-year BTP-Bund spread traded in quite a tight range, ending the month slightly wider at around 1.08%, compared to 1.05% at the start of July.

Fund allocation

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Name Sector Weight
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Currency policy

The fund is not exposed to currency risks, as the fund invests in Euro-denominated bonds and derivatives are used to hedge the currency risk to the US Dollar.

Derivative policy

Robeco Euro Government Bonds makes use of government bond futures. These derivatives are regarded very liquid.

Dividend policy

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. This means that the fund's total performance is reflected in its share price performance.

ESG Integration policy

In our government bond portfolios, the active country allocation is based on a combination of top-down and bottom-up analysis. In the bottom-up analysis, besides debt sustainability and economic cycle, ESG criteria are an integral part of our analysis. For our top-down analysis, our in-house developed RobecoSAM Country Sustainability Ranking (CSR) is used in our country allocation decisions. The CSR acts as an early-warning system which helps us to identify problems as well as opportunities in countries well before they are reflected in spreads, or are picked up by the rating agencies.

Investment policy

Robeco Euro Government Bonds is an actively managed fund that invests only in euro-denominated government bonds. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.The fund aims for a better sustainability profile compared to the Benchmark by promoting certain ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries. The fund invests in euro denominated bonds issued by the EMU-member countries. It employs an investment process combining top-down and bottom-up elements. Fundamental analysis is performed on each of the three performance drivers: country allocation, duration (interest rate sensitivity) management and yield curve positioning. Country ESG scores are part of our bottom-up analysisThe majority of bonds selected will be components of the Benchmark, but bonds outside the Benchmark may be selected too. The fund can deviate substantially from the weightings of the Benchmark. The fund aims to outperform the Benchmark over the long run, whilst still controlling relative risk through the applications of limits (on currencies) to the extent of deviation from the Benchmark. This will consequently limit the deviation of the performance relative to the Benchmark. The Benchmark is a broad market weighted index that is not consistent with the ESG characteristics promoted by the fund.

Risk policy

Risk management is fully embedded in the investment process so as to ensure that the fund's positions remain within set limits at all times.

Sustainability profile

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Exclusions

Full ESG Integration

ESG integration policy

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In our government bond portfolios, the active country allocation is based on a combination of top-down and bottom-up analysis. In the bottom-up analysis, besides debt sustainability and economic cycle, ESG criteria are an integral part of our analysis. For our top-down analysis, our in-house developed RobecoSAM Country Sustainability Ranking (CSR) is used in our country allocation decisions. The CSR acts as an early-warning system which helps us to identify problems as well as opportunities in countries well before they are reflected in spreads, or are picked up by the rating agencies.

Expectation of fund manager

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With vaccinations progressing, it seems premature to fully price in an extension of PEPP. Indeed, for now we stick to the baseline view that PEPP will be gradually phased out by mid-2022 and that the current PEPP envelope of EUR 1,850 bln will not be expanded. A sharp rise in Eurozone inflation prints from August (albeit in part due to German VAT base effects) and the more uncertain pandemic outlook imply that the ECB is unlikely to rock the boat at the early September meeting – and will refrain from pre-committing to an end date for PEPP as they announce a slowdown in the PEPP purchase pace for Q4. Against this backdrop and given the possibility of a top-up of the net monthly APP purchase pace next year as and when the PEPP is phased out, it will be hard for markets to price in more than 20 bps of rate tightening by the end of 2023. Nonetheless, 5-year German Bund yields have now declined back to around -0.75%, a level last seen in January of this year, a time when European economies were still suffering from harsh lockdowns. The market has now effectively priced out vaccination effectiveness and a retracement higher in rates seems likely.

Michiel de Bruin, Stephan van IJzendoorn
Michiel de Bruin, Stephan van IJzendoorn

Michiel de Bruin, Stephan van IJzendoorn

Michiel de Bruin is Co-Head of the Fixed Income Global Macro team and Co-Manager of Euro Government Bonds. Prior to joining Robeco, Michiel worked for BMO Global Asset Management in London, most recently as Head of Global Rates and Money Markets. He held various other positions before that, including Head of Euro Government Bonds. The roles he fulfilled before joining BMO included Co-Head of Fixed Income Sales and Trading at NIB Financial Markets in Amsterdam. Michiel started his career in the industry in 1986 and he holds a Bachelor's degree from Amsterdam University of Applied Sciences. Mr. van IJzendoorn is a Portfolio Manager in Robeco's Global Fixed Income Macro team. Prior to joining Robeco in 2013, Stephan was employed by F&C Investments as a Senior Portfolio Manager Fixed Income. Before his move to F&C Investments he worked in similar functions at Allianz Global Investors and A&O Services. Stephan started his career in the Investment Industry in 2003. He holds a Bachelor's degree in Financial Management, a Master's degree in Investment Management from the VU University Amsterdam and is CEFA charterholder.

Details

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Management company
Fund capital
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ISINLU1218873120
BloombergROEGIHU LX
Valoren27851911
WKN
Availability
1st quotation date1432771200000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

Cost of this fund

Ongoing charges

This fund deducts ongoing charges of
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The expected transaction costs are

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Fiscal product treatment

The fund is established in Luxembourg and is subject to the Luxembourg tax laws and regulations. The fund is not liable to pay any corporation, income, dividend or capital gains tax in Luxembourg. The fund is subject to an annual subscription tax ('tax d'abonnement') in Luxembourg, which amounts to 0.01% of the net asset value of the fund. This tax is included in the net asset value of the fund. The fund can in principle use the Luxembourg treaty network to partially recover any withholding tax on its income.

Fiscal treatment of investor

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual investors to consult their financial or tax adviser about the tax consequences of an investment in this fund in their specific circumstances before deciding to invest in the fund.

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Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

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