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 | |
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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.
Performance explanation
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Based on transaction prices, the fund's return was -0.24%. The fund underperformed its benchmark by 18 bps in September, bringing the year-to-date underperformance to roughly -0.50% (gross of fees). The year-to-date underperformance stems from our beta underweight, as we retain a clear quality bias. In September, the beta underweight delivered a negative contribution of 7 bps. The contribution from issuer selection is positive over 2021, with a small minus of 11 bps for the month. Our implemented quality biased detracted some relative performance, as in Europe single Bs were the outperformers on a risk-adjusted basis. Oil prices kept rising, so the energy sector, albeit small in size, performed well during the month. The transportation sector in Europe still benefits from the reopening of travel and increased container fees due to shortages. On an issuer level, we benefited from not owning SoftBank, as the sentiment around Chinese tech stocks was still negative. The largest detractor is our overweight in Adler Group (-14 bps). Some politics-related negative headlines on whether the regulator BaFin had investigated the Adler Group merger last year (with ADO/Consus) pushed bonds down 10-15 bps depending on their structure.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}The European high yield bond market had a somewhat weaker month, with total returns ending up at 0.02%. Excess returns were mildly positive, but the market absorbed a sharp increase in government yields. Underlying government bonds detracted 44 bps from the total return. The 10-year US Treasury yield rose 18 bps in September to 1.49% in response to rather hawkish outcomes at the BoE and Fed meetings. A hawkish Monetary Policy Council meeting had economists pull forward the BoE's first rate hike by a quarter to 22Q1. This led to a steep increase in government bond yields across Europe. The headline that dominated the market was that Chinese property developer Evergrande missed a coupon payment. Market sentiment turned negative, as a potential default could have major consequences for China, global growth and risky assets. Another market mover was related to the steep increase in power prices across the globe. In particular Europe witnessed a substantial increase in gas prices on the back of feedstock scarcity. Primary markets continue to function well, with over EUR 10.3 billion of issuance in European high yield. European high yield spreads are currently at 297 bps.
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
Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.
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 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, next to engagement. The portfolio is broadly diversified, with a structural bias to 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, whilst still controlling relative risk through the applications of limits (on currencies and issuers) 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 to ensure that positions always meet predefined guidelines.
Sustainability profile
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}
ESG integration policy
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.
Expectation of fund manager
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}Do fundamentals still matter in a world of financial repression, in which monetary and fiscal policymakers set the stage? It seems that markets have downplayed the role of fundamentals for years; one scenario in which the relationship between fundamentals and markets might return is when central banks loosen their grip. But while the inflation debate is not yet settled, there are other questions to consider, given that tapering is now widely anticipated. Instead, we should be prepared for some less well-flagged themes that could drive the normalization of risk premiums in credit markets. Still a key metric to watch is wage inflation, as this might give an indication of the persistence of inflation and tightness in labor markets. This holds for Europe as well as the US. China will shift its focus from outright growth to more balanced growth via its 'common prosperity' plans. The sharpening in focus is very relevant for certain sectors and will probably also have a dampening impact on global growth. With spreads still near an all-time tight, a cautious positioning makes sense to us. At the margin we have a small preference for financial institution credit.
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 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.
