Robeco Financial Institutions Bonds M2H USD
- Diversified exposure to subordinated financial bonds
- Disciplined and repeatable investment process
- No active duration, nor FX exposure
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 -0.16%. The fund posted a positive return in December, which was a nice change from the negative returns in October and November. The average spread for the fund’s index widened from 270 basis points at the end of November to 274 basis points at the end of December. Carry compensated for the small spread widening and a decline in underlying government bond yields contributed positively to the return. The credit beta of the portfolio was above one during the month, the performance impact was small since the overall spread return was close to zero. Issuer selection contributed positively to the performance and the fund outperformed its index. Italian credit performed well and this was also the case for several Spanish and Portuguese issuers. Portfolio holdings that benefited from spread tightening were for instance Generali, BBVA, Sabadell and Caixa Geral. Portfolio positions that lagged were mostly Tier 1 Cocos. Bonds with low reset spreads underperformed, this has been a trend throughout the year. In relative terms, the portfolio benefited from not owning some index bonds that widened significantly. Examples here are Phoenix Group, Uniqa and Grand City Properties.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Risk appetite in capital markets was limited in December, though the level of pessimism was highest in the US and not in Europe this time. Sentiment towards Italy improved considerably, as the Italian government decided to adjust its 2019 budget a little bit, to avoid an Excessive Deficit Procedure. Italian government bonds performed well in December, as did bonds issued by banks and insurers in Italy and Spain. In the UK, the parliamentary vote on the exit deal was postponed until January. It is still unlikely that the deal will be approved by parliament at first instance. Spreads for UK banks recovered a bit in December. For the asset class in general, spreads on subordinated financial debt widened just a few basis points during the month. At the same time, spreads for US credit and high yield widened significantly. As expected, the Fed raised interest rates, but the outlook for further hikes in 2019 was more hawkish than the market had hoped for. Trade war tensions increased after the arrest of Huawei’s CFO in Canada. Investment flows continued to be negative, this has been a negative factor for a while already.
Fund allocation
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundAllocations.date,'llll') ]}}| Name | Sector | Weight |
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Fund Classification
| Yes | No | N/A | ||
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| Voting | ||||
| Engagement | ||||
| ESG integration | ||||
| Exclusion |
| Yes | No | N/A | ||
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| Screening | ||||
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| Sustainability Themed Fund |
Currency policy
All currency risks are hedged.
Derivative policy
Robeco Financial Institutions Bonds fund make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.
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
Robeco Financial Institutions Bonds mainly invests in subordinated euro-denominated bonds issued by financial institutions. The fund offers a diversified exposure across 50-60 issuers, including the new style hybrid bonds that are being issued on the back of Basel III regulation. Focus of the fund are higher rated bonds (investment grade) with a tilt to Tier 2 bonds. The fund aims to outperform its index Barclays Euro-Aggregate: Corporates Financials Subordinated 2% Issuer Cap. The index 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. As the investment process is well-structured and proven over time, it contributes to repeatable performance delivery. Duration of the portfolio is managed in line with the index and currency exposure is hedged.
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') ]}}Spreads widened significantly during the fourth quarter, leaving the trading range that we saw since the start of the summer. In fact, spreads are now trading in the range that we last saw in the first half of 2016. At that time, markets were worried about a global slowdown in economic growth. For the financial sector specifically, markets worried about the credit risk of Deutsche Bank and about the fact that coupon payments on AT1 CoCos could be at risk. To some extent, we are seeing similar worries right now. Economic growth is slowing down and the market is currently reassessing the risk of callable bonds being extended after the first call date. We would argue that a large part of the increased risks is priced in by the market. Bonds with low reset spreads have widened significantly and are trading at cheap levels now. Brexit, Italy and conduct charges are risks facing the financial sector, but the companies involved have seen a significant repricing already. We are not concerned about the fundamental credit quality of the sector. The significant deleveraging that took place over the past years means that the sector is well equipped to face lower economic growth.
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
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}| Management company | |
| Fund capital | |
| Size of share class | |
| Outstanding shares | |
| ISIN | LU1618352774 |
| Bloomberg | RFIM2HU LX |
| Valoren | 36852528 |
| WKN | |
| Availability | |
| 1st quotation date | 1495065600000 |
| Close financial year | 31-12 |
| Legal status | |
| Tracking error limit (%) | |
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Cost of this fund
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Transaction costs |
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| The expected transaction costs are |
Performance fee |
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| This fund may also deduct a performance fee of |
Extra fees
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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.
