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 1.27%. The fund posted a positive return in February, as credit spreads continued the tightening that started early January. The average spread for the fund’s index tightened from 247 basis points at the end of January to 229 basis points at the end of February. The excess return of subordinated debt of financials over government bonds therefore was 1.26%. Underlying government bond yields rose somewhat and this contributed negatively to the performance of the fund. The credit beta of the portfolio was above one during the month. This top-down position contributed positively to the relative performance of the fund and the fund outperformed its index. Issuer selection contributed negatively to the performance. Spanish issuers underperformed in February. This means that the overweight position in Spanish banks contributed negatively. Tier 1 Cocos underperformed on a risk-adjusted basis. This was another detractor from the fund’s performance. The fund was not invested in the Santander Cocos that were extended by the bank. The underweight position in REITs contributed positively to the relative performance.
Statistics
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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Risk appetite remained strong during February and credit spreads continued to tighten. One of the positive factors in the past weeks was the fact that the US and China seem to get closer to striking a trade deal. The risk of a hard Brexit has been reduced, now that the possibility of an extension of the 29 March deadline has been mentioned by Theresa May. UK banks performed well in the last week of February. Santander surprised the market by not redeeming their first Tier 1 Coco, a perpetual instrument with optional redemption in March 2019. The bank had indicated that the decision to redeem would be based on economic principles only. Since the bank had issued a new instrument just a few weeks before the call date, markets had expected Santander to redeem its old bond. The market impact of this first non-call was fairly limited, as instruments with higher extension risk had underperformed significantly last year already. Several new subordinated instruments were issued in February. We participated in the issuance of a new Tier 1 Coco by KBC. We like the issuer and we like the reset spread of this new instrument. We still focus on buying instruments with lower extension risk.
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 | ||||
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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
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') ]}}Credit spreads have tightened significantly in the last two months, but are still trading at an attractive level. Spreads for all main categories of subordinated bonds have doubled from the levels that we saw one year ago. Global economies are undeniably slowing down and specific macro risks like Brexit, Italy and the trade war have not been resolved yet. We think that the financial sector is very well prepared to deal with a weaker economic environment. Bank capital ratios are at the highest level of the past decade and solvency ratios for insurance companies are strong. Financial institutions are not helped by the continuing low-rate environment, but we expect that investors soon will be starting to search for yield again. In a weaker economic environment solid credit underwriting is key. This has always been core in our fund. We are still avoiding Italian banks and we are not chasing high-risk positions in less-developed countries. We have reduced our high yield exposure a bit during the rally of the last months. We have also reduced exposure to bonds with higher extension risk.
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 |
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Cost of this fund
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Transaction costs |
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Performance fee |
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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.
