Robeco European High Yield Bonds 0IH EUR
- Managed with a conservative approach
- Disciplined and repeatable investment process
- Experienced team management
About this fund
Price development
Performance
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundPerformances.date,'llll') ]}}| Fund | Index | |
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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 | |
|---|---|---|
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
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Based on transaction prices, the fund's return was -1.01%. The European high yield bond index was down 1.1% in May, on higher spreads and higher rates. The fund outperformed its benchmark by 14 bps. For the year, total returns are still in negative territory at -7.82%. The fund underperformed the index by 24 bps year-to-date. The outperformance for the month was mainly on the back of issuer selection, which added 11 bps. Being up in quality added to the relative performance, as high quality outperformed low quality on a risk-adjusted basis. Sticky inflation and increasing recessionary fears are putting pressure on consumer discretionary spending. For that reason, consumer cyclicals was the worst-performing sector for the month. For example Douglas, a German cosmetic retailer, was a large underperformer, adding 3 bps to our relative performance. The same holds for not owning UK supermarket Asda (+3 bps). Declining top-line revenue and M&A rumors weigh on this company. Overweight positions in Faurecia and VMED both added 2 bps. The largest detractor was our position in Cellnex (-9 bps), where we own the convertible that traded in line with the weakness in equities.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}European high yield spreads have been very volatile in May. Spreads widened in the first weeks to new highs and reached a level as high as 517 bps, which is in line with the long-term average for high yield. During the last three days of May, this prior spread widening reversed completely, and spreads ended the month at 476 bps. The biggest market shift in May was the changing narrative from inflation risks to growth risks, while headline CPI numbers remain above expectations. Next to that, supply chains remain disrupted and a slowdown in China, due to its zero-Covid policy, and elevated geopolitical risks are becoming a drag on global growth expectations. The probability of a recession is increasing, and this is putting pressure on central banks and their monetary policies. Earnings figures are more often disappointing and EBITDA outlooks are being revised downwards. The volatility and negative sentiment in high yield markets is also weighing on the new issue market, that came in at a meager EUR 2 billion for May. Flows were again negative for the month, although dip buyers emerged towards month-end.
Fund allocation
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundAllocations.date,'llll') ]}}| Name | Sector | Weight |
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Currency policy
All currency risks are hedged.
Derivative policy
Robeco European High Yield Bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.
Dividend policy
The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.
ESG Integration policy
The fund incorporates sustainability in the investment process via exclusions, ESG integration and engagement. The fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.
Investment policy
Robeco European High Yield Bonds is an actively managed fund that invests in bonds with a sub-investment grade rating, issued primarily by European and US issuers. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, and engagement. The portfolio is broadly diversified, with a structural bias towards the higher rated part in high yield (BB/B). Performance drivers are the top-down beta positioning as well as bottom-up issuer selection. The 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, while still controlling relative risk through the application of limits (on currencies and issuers) to the extent of the 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 to ensure that positions always meet predefined guidelines.
Sustainability profile
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}
Sustainability
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}The fund incorporates sustainability in the investment process via exclusions, ESG integration and engagement. The fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.
Expectation of fund manager
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}Until recently, markets were exclusively focusing on how the global economy would emerge from a Covid-disrupted world. The common market expectation was one of a continued economic recovery with inflationary risks attached. With the war in Ukraine, the growth narrative for Europe in particular is under threat, while inflation is getting an additional boost. As Russia is a major exporter of a variety of commodities, supply shortages are quickly becoming a fierce cost-push factor. The high energy dependency of Russia will be reduced, but at a cost: higher prices but also risks to growth, output and profitability. That makes stagflation a real scenario now, especially for energy-dependent Europe. A slowing economy and rising yields is the worst environment for leveraged companies. We expect more dispersion, underperformance of weak credit quality and more defaults. We remain underweight in the more vulnerable B and CCC space. Over the past quarter, credit markets have cheapened though, in particular in the BB space. In better-quality high yield we therefore selectively see attractive valuation levels. To sum up, we firmly remain up in quality and accept a beta below 1 as a result.
Roeland Moraal, Sander Bus
Roeland Moraal is Lead Portfolio Manager European High Yield in the Credit team. Before assuming this role, he was Portfolio Manager in the Robeco Duration team and worked as an Analyst with the Institute for Research and Investment Services. Roeland started his career in the industry in 1997. He holds a Master's in Applied Mathematics from the University of Twente and a Master’s in Law from Erasmus University Rotterdam. Sander Bus is Co-Head of the Credit team and Lead Portfolio Manager Global High Yield Bonds. He has been dedicated to High Yield at Robeco since 1998. Previously, Sander worked for two years as a Fixed Income Analyst at Rabobank where he started his career in the industry in 1996. He holds a Master's in Financial Economics from Erasmus University Rotterdam and he is a CFA® charterholder.
Team
The Robeco European High Yield fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team’s fundamental research. Our analysts have long term experience in their respective sectors which they cover globally. Each analyst covers both investment grade and high yield, providing them an information advantage and benefiting from inefficiencies that traditionally exist between the two segmented markets. Furthermore, the credit team is supported by three dedicated quantitative researchers and four fixed income traders. On average, the members of the credit team have an experience in the asset management industry of seventeen years, of which eight years with Robeco.
Details
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}| Management company | |
| Fund capital | |
| Size of share class | |
| Outstanding shares | |
| ISIN | LU1040800143 |
| Bloomberg | REHOIHE LX |
| Valoren | 23834271 |
| WKN | A14WFK |
| Availability | |
| 1st quotation date | 1395878400000 |
| Close financial year | 31-12 |
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Cost of this fund
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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.
