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Robeco European High Yield Bonds FH EUR

Index: Bloomberg Pan-European HY Corporate ex Financials 2.5% Issuer Constraint index
ISIN: LU0940007346
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Asset class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

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 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.

Price development

No performance data available

Price development

Robeco European High Yield Bonds FH EUR

Performance

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The value of the investments may fluctuate. Past performance is no guarantee of future results.
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
The value of the investments may fluctuate. Past performance is no guarantee of future results.
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

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Based on transaction prices, the fund's return was 0.26%. The European HY bond index delivered a total return of 0.27% in March, which is the most positive month of the year. Excess returns were 1.88%, where underlying sovereign rates widened, detracting around 160 bps from total returns. The fund outperformed its benchmark by 9 bps. Our beta positioning contribution was negative by -4 bps, as spreads tightened for the month. Issuer selection was positive and added 14 bps. Our quality bias, overweighting BBs versus and underweight in Bs and CCCs, contributed positively, as higher rating categories outperformed slightly on a risk-adjusted basis. On an issuer level, we benefited by being underweight Telecom Italia (+7 bps). This large benchmark issuer is struggling in its domestic market and needs to spend a high amount of capex on fiber to remain competitive. Takeover/merger rumors and the uncertainties around them caused bonds to underperform. The largest detractor was our overweight in Kloeckner (-5 bps). Input cost pressures and the company's ability to pass them on are concerning markets. For that reason, bonds underperformed as commodity prices rose. Our overweight in Nomad foods delivered 2 bps of performance.

Statistics

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Market development

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European high yield bond spreads reversed direction and gained back some of the widening they had seen last month. A hawkish Fed narrative and a developing conflict in Ukraine produced sharply higher rates in March, a spike in commodity prices and volatility in high yield bond prices. March produced the second most significant spread tightening of the last 15 months. On the other hand, underlying Bund yields rose more than 50 bps in March. The intensifying conflict between Russia and Ukraine led to a global rise in oil and commodity prices – with Brent oil touching as high as USD 133. The spike in inflation pressures has created significant problems for central banks, forcing them to pursue a much more aggressive tightening cycle than was expected at the start of the quarter. For example, markets are now anticipating a 50-bps hike by the Fed. Pharma and energy were the best-performing sectors, whereas automotive and chemicals were the laggers. High yield primary markets were soft for a second consecutive month amid heightened secondary price volatility. The total amount issued reached EUR 1.7 bln. European high yield spreads tightened 37 bps and are now at 390 bps. Yields rose 6 bps and are now 4.44%.

Fund allocation

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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 certain ESG (environmental, social and corporate governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, and integrates ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list based on controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, alongside 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

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Exclusions

ESG Integration

Engagement

Sustainability

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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

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With the conflict in Ukraine, higher oil prices and even more supply chain disruptions, it is clear that an even wider set of possibilities has to be assessed for fundamentals. If anything, downside risks to the economy have risen materially and recession risk is now debated openly. Although a recession might be still one or two years away, markets might anticipate it within the next 12 months. The European economy will be hit hard by this crisis. Europe faces supply chain issues and is of course highly dependent on energy from Russia, besides agricultural commodities from Ukraine. Europe is a net importer of oil and gas and remains dependent for its energy supply for many years to come. The conclusion for valuations is that spreads are around median levels again, which is wider than at any time in the past seven quarters. That said, the range of tail risk events is broad enough that it is not wise to take a long beta position over the medium term. This means that we like to stick to our underweight beta positioning overall, despite the fact that European HY credit spreads have cheapened up over the past months.

Roeland Moraal, Sander Bus
Roeland Moraal, Sander Bus

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

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Management company
Fund capital
Size of share class
Outstanding shares
ISINLU0940007346
BloombergROEHYFH LX
Valoren21529162
WKN
Availability
1st quotation date1378166400000
Close financial year31-12
Legal status
Tracking error limit (%)
Morningstar
Reference index

Cost of this fund

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This fund deducts ongoing charges of
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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.

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Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

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