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Robeco Financial Institutions Bonds Feeder Fund - zero duration D2H USD

Reference index: Bloomberg Barclays Euro-Aggregate: Corp. Fin. Subordinated 2% Issuer Cap (Hedged into USD)
ISIN: LU1857098922
  • Diversified exposure to subordinated financial bonds
  • Disciplined and repeatable investment process
  • No active duration, nor FX exposure
Assets class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

This actively managed fund is a feeder Fund ( the “Feeder Fund”) and as such invests at least 85% of its assets in class Z2H shares of Robeco Capital Growth Funds SICAV – Robeco Financial Institutions Bonds (“the Master”). The Master is a sub-fund of Robeco Capital Growth Funds SICAV, a Luxembourg open-ended investment company with variable capital. The Master invests mainly in subordinated euro-denominated bonds issued by financial institutions and similar nongovernment fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% Issuer Cap. The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund.

Price development

No performance data available

Price development

Robeco Financial Institutions Bonds Feeder Fund - zero duration D2H USD

Performance

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Fund Reference index
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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 -0.06%. The underlying portfolio posted a positive return in January, which was better than the return of the index. The average credit spread of the index closed the month at a level of 158 basis points, which is 9 basis points higher than at the end of December. This means that subordinated financial bonds performed 0.25% worse than underlying government bonds. Yields of underlying government bonds declined during the month, contributing positively to the portfolio's return. The beta of the underlying portfolio was above one during the month, which contributed negatively to the performance of the fund. The contribution of issuer selection was positive in January. Bank CoCos posted a better return than the benchmark, which contributed to the outperformance of the fund. The best-performing positions on a risk-adjusted basis were CaixaBank, LeasePlan and Bankia. Insurance debt underperformed the benchmark, likely driven by the decline in government bond yields. This contributed negatively to performance, as we hold an overweight position. The worst-performing positions were AXA, Allianz and Swiss Life.

Statistics

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Market development

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Market sentiment was positive, when looking at the performance of equity markets. Bond investors seemed to be more risk-averse, as was evidenced by a strong decline in government bond yields. Worries about the coronavirus and the subsequent decline in oil prices are explanatory factors for lower bond yields. However, the impact on credit markets was limited. Non-financial spreads only widened a few basis points, while financial spreads widened a little bit more. Higher risk bond categories and names that underperformed last year did very well in January. Examples are bank CoCos and names such as Deutsche Bank and Monte dei Paschi. The fund has no exposure to these individual names. Insurance bonds underperformed, especially bonds with a perpetual non-call 10 structure. The fund is overweight in this category. The market was open for new issues again, we participated in new bond deals such as Santander CoCos and Jyske Bank Tier 2s. Santander announced the redemption of the CoCo that it had left outstanding in March 2019.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
Engagement
ESG integration
Exclusion
YesNoN/A 
Screening
Integration
Sustainability Themed Fund

Currency policy

All currency risks are hedged.

Derivative policy

The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund.

Dividend policy

This share class of the fund does not distribute dividend.

ESG Integration policy

The prime goal of integrating ESG factors in our analysis is to strengthen our ability to assess the downside risk of our credit investments. Our analysts include RobecoSAM sustainability data and use external sources to make an ESG assessment as a part of the fundamental analysis.

Investment policy

This Fund is a feeder Fund ( the “Feeder Fund”) and as such invests at least 85% of its assets in class Z2H shares of Robeco Capital Growth Funds SICAV – Robeco Financial Institutions Bonds (“the Master”). The Master is a sub-fund of Robeco Capital Growth Funds SICAV, a Luxembourg open-ended investment company with variable capital. The Master invests mainly in subordinated euro-denominated bonds issued by financial institutions and similar non-government fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% Issuer Cap (hedged into USD).

Risk policy

Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.

Expectation of fund manager

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Spreads have tightened massively from the peak at the end of 2018 and are now approaching the levels of January 2018. However, after the ECB meeting in September, it has become clear that monetary policy will remain very accommodative for the next years. This means that interest rates will remain low and that investors are almost forced to hunt for yield.We do not think that searching for yield in the area of subordinated financial debt is too risky. It is clear that the quality of balance sheets has improved significantly over the past decade, especially for the banking sector. This is acknowledged by supervisors and the first relaxation of capital rules for European banks has been announced. In the near future, banks will be allowed to replace a small part of their common equity buffer by Tier 1 and Tier 2 debt. We do not see that as a turnaround in the restoration of capital buffers, but more as a confirmation that banks have reached buffer levels that are sufficiently high.In our portfolio construction we maintain our traditional conservative stance, while we still see interesting opportunities for instance in Spanish banks and in the relatively new category of insurance CoCos.

Jan Willem de Moor
Jan Willem de Moor

Jan Willem de Moor

Mr. de Moor is a Senior Portfolio Manager and a member of the Credit team. Prior to joining Robeco in 2005, Mr. de Moor was employed by SBA Artsenpensioenfondsen as Senior Portfolio Manager Equities for six years. Before that, he worked at SNS Asset Management holding positions of Portfolio Manager Equities (three years) and Research Analyst (two years). Jan Willem de Moor started his career in the Investment Industry in 1994. He holds a Master's degree in Economics from Tilburg University.

Team

The Robeco Financial Institutions Bonds fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts (of which four financials 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 dedicated quantitative researchers and 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
ISINLU1857098922
BloombergROFID2H LX
Valoren42784521
WKN
Availability
1st quotation date1533168000000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

Cost of this fund

Ongoing charges

This fund deducts ongoing charges of
These charges comprise
Management fee
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Transaction costs

The expected transaction costs are

Performance fee

This fund may also deduct a performance fee of

Extra fees

max entry fee
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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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Important legal information

The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.

The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.

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