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 | 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 5.49%. The total index return of European subordinated financial debt was 5.5% this month. Credit spreads tightened by 89 basis points to 279 basis points, which means that the spread return of subordinated financial debt amounted to 5.2%. The portfolio return was very close to that of the index. We increased the beta overweight during the sell-off in March, which means that we started April with a beta of 1.25. This overweight paid off, as spreads tightened. Issuer selection contributed negatively, offsetting the gains of the beta overweight. The negative contribution of issuer selection can be explained by the fact that the beta overweight was to a large extent implemented through positions in bank CoCos. This bond category performed well, but underperformed on a risk-adjusted basis. Looking at individual names, overweight positions that contributed most on a risk-adjusted basis were Swiss Life and CBA. Laggards in the portfolio were LeasePlan, Santander and BBVA.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Markets showed a remarkable change of direction in early April, as investors were comforted by central banks' support, relaxed capital requirements for banks and governments supporting companies and economies. Towards the end of the month, markets started to focus on the first signs of relaxation of lockdowns. Spreads tightened significantly in April, reversing half of the widening that took place in March. The market was very much open for new bond issuance, but there was no issuance at all of subordinated bank or insurance debt. Banks did issue senior preferred and senior non-preferred bonds, and those deals were received well by the market.Many bonds in the portfolio have recovered in line with the market, but there are some bonds that are still trading very close to the peak spread levels of March. In our credit committees, we are focusing on these names, preparing scenario analyses to see how much loan losses these banks can absorb. We have not sold any positions following these committee meetings, and earnings releases so far confirm the validity of our analyses.
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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| Exclusion |
| Yes | No | N/A | ||
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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
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 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') ]}}The focus is once again on the financial sector. Our view is that banks are not at the root cause of this particular crisis, but instead are needed as part of the solution. In particular, the banking system will have a key role in stemming the acute liquidity crisis in the global economy, by acting as a conduit to channel public funds to the private sector. European banks today are also in much better shape than in the period leading up to the GFC, mostly thanks to the Basel 3 regulations and the issuance of bail-in bonds that have strengthened capital ratios. Banks this time round hold much more capital, are better funded and have more liquidity. Lastly, credit markets reacted in an unprecedented fashion during March and are currently pricing in a deep recession. The speed of the sell-off has been unmatched and spreads are now at levels that are rarely seen. We like to take advantage of these wider spread levels and have increased the market sensitivity of the portfolio. That does not mean that we have left our traditional conservative way of managing the portfolio, as we still focus on the quality of balance sheets and the ability of banks to absorb higher loan losses.
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 | |
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| Outstanding shares | |
| ISIN | LU1618352774 |
| Bloomberg | RFIM2HU LX |
| Valoren | 36852528 |
| WKN | |
| Availability | |
| 1st quotation date | 1495065600000 |
| Close financial year | 31-12 |
| Legal status | |
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Cost of this fund
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Transaction costs |
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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.
