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 | Reference 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 1.56%. The European high yield index delivered a total return of around 1.8% in June, bringing the total return for the year to -5.1%. During the month spreads tightened almost 40 bps. The fund underperformed the index by around 13 bps, depending on the share class (gross of fees). Our underweight beta was a small detractor of 4 bps, our issuer selection detracted 10 bps. Our underweight in CCCs was the largest detractor (-27 bps). The market was full risk-on and investors looking for yield were pushing these lower-rated bonds up. In that sense, we benefited from our overweight in the automotive space as this was one of the sectors that missed the rally until June. From an issuer perspective, our overweight in Garret Motion and Europcar added more than 10 bps. There was a lot of news around Europcar. Firstly, they experienced the complete collapse in car rental demand. Then, with the ease of lockdowns, the interest in car rentals picked up, as people are reluctant to use public transportation. Lastly, rumors that Volkwagen AG would have an interest in the company helped the bonds to recover to almost 80 cents on the dollar, still 20 points below the pre-Covid-19 level.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}The rally in European high yield credit spreads since mid-March carried over to the first half of June, but stalled towards month end as concerns about economic reopenings offset the primary positive reaction to central banks corporate buying programs. Spreads finished the month 37 bps tighter at a level of 540 bps. Underlying government bonds added 6 bps as Bund yields ended the month lower. Despite the anxiety around rising Covid-19 cases in some of the most populous states in the US, new issuance continues to set new records in the US. Nearly USD 60 billion got printed, which is the largest volume on record. Also in the European high yield market we witnessed record supply (EUR 9.5 billion). Fallen angels volumes continue to rise, but at a slower pace compared to previous months. Mutual funds and ETFs experienced inflows of around USD 1.7 billion in Europe. Year-to-date, European high yield has experienced USD 5 billion of outflows. Top-performing sectors: consumer products (+3.9%), gaming (+3.7%) and consumer cyclical services (+3.3%); bottom-performing sectors: pharma, lodging and paper (unchanged). The average yield to worst of the global high yield index ended the month at 4.97%.
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') ]}}The economic fallout that we saw in 20Q2 was unlike anything we have ever seen in our careers. On top of that, an oil supply shock created the perfect storm for risky assets. But while Covid-19 is the proximate trigger, we firmly believe current events are not just about the virus. They have deep secular and cyclical roots. Markets have since soared and are treating Covid-19 as a growth shock. To justify this rally, we really need a normalization in earnings. We have our doubts that this will materialize. The ‘common enemy’ elicited a massive unconventional, coordinated series of stimulus by policy makers. All rules have changed. Government stimulus is financed by central banks. We have our doubts about this, too. But a deep recession, increasing numbers of defaults and heightened uncertainty surrounding corporate earnings, will be with us for some time. We have gone underweight in high yield. Dispersion remains high and the accelerated downgrades into the lowest ratings make us cautious. Technicals rule for now but fundamentals might strike back.
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.
