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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| {{'fund.detail.performance.period.sinceInception' | labelize:[ fundDate(fund.fundPerformances.sinceStart.startDate,'MM-YYYY') ]}} |
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 0.37%. After a volatile beginning, the year ended with a flat total return and a flat relative return. Being overweight European financials benefited the portfolio as these outperformed corporates both in absolute terms and risk-adjusted. All sectors printed negative excess returns. Adjusted for risk basic industries and capital goods were this month's laggards. This was driven by global growth concerns on the back of the coronavirus outbreak and the uncertainties attached to that. On an issuer level, we benefited from our overweight in Tereos (+6 bps). The French sugar producer showed good results as the sugar spot price moved up, which is one of the main credit drivers. Furthermore, we saw Atlantia being downgraded to high yield. This Italian toll road operator will enter the index with a 2%-plus market weight. Bonds were volatile on the back of a potential revocation of Atlantia’s operating concession rights and the unknown compensation from the Italian government that would come along. We saw this as an opportunity to step in this capital structure and benefited from the rally as uncertainties fizzled out towards month end.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}European high yield bonds extended the December rally into the first two weeks of January. The strong technical support which has fueled the market suddenly stopped when investors started to react to the impact of the coronavirus outbreak. Equity volatility picked up, credit spreads widened and the safe heaven government bond yields tightened pretty ferociously. 10-year German Bund yields came down to -0.45% from -0.20% at start of the year; underlying government bonds added 52 bps to total returns. Top-performing sectors: metal & mining (+1.6%), food & beverages (+1.2%); bottom-performing sectors: lodging (-1.1%), chemicals (-1.0%) and paper (-1.0%). New issue supply surged, primary market activity totaled USD 38.5 billion in the US, one of the busiest months on record. The same elevated activity was visible in Europe, where EUR 13.2 billion of supply hit the market. Companies try to take advantage of the still favorable financing conditions, as new-issuance coupons in Europe came down to 2.20%, compared to 3.67% in 2019. The European high yield index spread widened by as many as 50 bps for the month; the average yield is now close to 3.07%.
Fund allocation
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundAllocations.date,'llll') ]}}| Name | Sector | Weight |
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Fund Classification
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| Sustainability Themed Fund |
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 invests in bonds with a sub-investment grade rating, issued by European issuers. The portfolio is broadly diversified across approx. 80 issuers, 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. Duration of the portfolio is managed in line with the index and currency exposure is hedged. The fund aims to outperform its index Barclays Pan European High Yield ex Financials 2.5% Issuer Cap. The index excludes high yield financials based on relatively high systematic risk, and applies an issuer cap to avoid concentration risk. The investment philosophy is based on managing a solid diversified portfolio with a long term view. Top-down beta positioning is based on the outcome of our credit quarterly outlook meeting, in which the team is discussing the fundamental market outlook, valuation of bond markets and market technicals. Bottom-up issuer research is executed by our credit analysts, who execute the fundamental analysis. The portfolio managers are responsible for the portfolio construction. A proprietary developed risk management approach avoids high risk concentration in the portfolio. The Robeco European High Yield fund is managed by our credit team which consists of seven portfolio managers and twelve credit analysts. Within the team, Sander Bus and Roeland Moraal are responsible for high yield. Sander has been involved in the fund since inception in 1998, Roeland joined in 2003. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team's fundamental research.
Risk policy
Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.
Expectation of fund manager
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}We are still convinced that we are approaching the end of the credit cycle. The US economy has become more vulnerable, with corporate earnings under pressure and a weakening industrial environment. The consumer is holding up well, supported by a strong labor market. But there are early signs of softening in these labor data. In Europe, the picture is similar. Going forward, a lot will depend on global trade disputes. A swift resolution of the US-China trade dispute would be very positive, but we think this is unlikely. On the other hand, an additional dispute between Europe and the US would be very negative for global trade, corporate earnings and investor sentiment. A bright spot are central banks, which continue to be very accommodative. In high yield, BB bonds have been driven to expensive levels, while CCCs are relatively cheap: a bifurcated universe in which buying the average spread is not an option. The choice is between safe but expensive BBs or trading down in quality to pick up yield, with a real risk of write-downs if the cycle turns. We stay up in quality and focus with bottom-up research on finding mispriced opportunities, of which there are currently only few.
Roeland Moraal, Sander Bus
Mr. Roeland Moraal, Vice President, CEFA, Portfolio Manager. Roeland is a Senior Portfolio Manager High Yield within Robeco's Credit team since January 2004. Before assuming this role, he was portfolio manager in our Rates team for two years and worked as an analyst with the Institute for Research and Investment Services for three years. Roeland started his career in the investment industry in 1997 at Robeco. He holds a Master's degree in applied mathematics from the University of Twente and a Master's degree in Law from Erasmus University, Rotterdam. Roeland became a CEFA charter holder in 2000 and he is registered with the Dutch Securities Institute. Mr. Bus is Head of the Credit team and manages our high yield portfolios. Prior to joining Robeco in 1998, Mr. Bus worked for Rabobank as a fixed income analyst for two years. Mr. Bus holds a Master's degree in Financial Economics from Erasmus University, Rotterdam. He became a CFA charter holder in 2003 and is registered with the Dutch Securities Institute. Mr. Bus has been active in the industry since 1996.
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.
