Robeco European High Yield Bonds DH 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 0.30%. The fund underperformed the index on a gross performance basis. Total returns were slightly positive and mainly driven by the rally in underlying Bunds. Our quality bias contributed once again to last month’s results. BBs outperformed Bs and CCCs on a risk-adjusted basis. On a sector level, we see technology and communications as the outperformers for the month. This on the back of Equinix being upgraded to investment grade. SFR and Altice delivered around 4% of total returns, which was on the back of a strong set of Q2 headline numbers. Another notable move in this space was the debt refinancing of Wind Tre. Parent company CK Hutchison (single A) announced its intention to repay Wind Tre’s EUR 10 bln in non-recourse debt. More or less the same happened to Refinitiv. They were bought by the London Stock Exchange Group, which is rated single A, for USD 27 bln. The biggest outperformer was not holding Thomas Cook, which added 5 bps to our relative performance. Bonds dropped more than 10 points and a restructuring of the capital structure seems unavoidable. Our off-benchmark position in UniCredit also contributed positively, as this Italian bank was upgraded to investment grade.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}The European high yield market traded more or less sideways in July, as a dovish central bank backdrop provided some support for spreads. Total returns were a small positive for the month, helped by the first rate cut by the Fed since 2008. Rates went down, but the market was disappointed the Fed did not deliver 50 bps of cuts. Mario Draghi’s last press conference for the ECB reaffirmed the bank’s dovish stance. Even without a firm change in policy, his statements pushed down German Bunds even further. The trade war with China remains a heated topic, sparking market-wide volatility as a deal seems more uncertain than before. The market has seen a small uplift in supply for the month, which was absorbed by the continuous inflow into our asset class. Year-to-date new issuance volume is still down 17% compared to last year. Equinix was upgraded to investment grade, which caused EUR 2.75 bln to leave the European High Yield Index. Automotive was the biggest laggard for the month, as the sector is suffering from top line contraction and suppliers revised their full year outlook downwards. The European High Yield Index spread widened and is now around 354 bps, with a yield of 3.01%.
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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| Yes | No | N/A | ||
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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') ]}}It is clear to us that deglobalization is under way. This is a secular trend fueled by widespread populism, which will cause trade tariffs to rise for the first time in 40 years. In the medium term, this will put pressure on the advantage of cheap outsourced labor (China), ultimately eroding record-high margins. Another secular trend is the development of a less economically favorable demographic backdrop, changing established trends in saving and investment. Finally, the bursting 12 years ago of the debt super cycle is the main ongoing reason for cautious household sector behavior and the consequent impotence of traditional monetary policy. Our research illustrates that there is typically a short period of time after the first rate cut where credit performs well, a ‘sugar rush’ if you will. Furthermore, we are having to cope with a cyclical slowdown in growth, more frequent mini spread cycles driven by lack of liquidity and central bank interventions due to fading inflation. Overall, our view is cautious as the cycle is late and valuations are tight. However, we know it is wise not to fight the Fed or the ECB. We focus on avoiding defaults, we continue to favor high-quality high yield.
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 | LU0226953981 |
| Bloomberg | RGCEHBD LX |
| Valoren | 2242471 |
| WKN | A0HGD6 |
| Availability | |
| 1st quotation date | 1128297600000 |
| 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 0.05% 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
The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise 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.
