Robeco High Yield Bonds CH USD

High yield spreads have been very volatile in May. Spreads widened in the first weeks to new highs and reached a level as high as 485 bps, which is in line with the long-term average for high yield. During the last three days of May, the spread widening reversed completely, and spreads ended the month at 426 bps. The biggest market shift in May was the changing narrative from inflation risks to growth risks, while headline CPI numbers remain above expectations. Next to that, supply chains remain disrupted and a slowdown in China, due to its zero-Covid policy, and elevated geopolitical risks are becoming a drag on global growth expectations. The probability of a recession is increasing, and this is putting pressure on central banks and their monetary policies. Earnings figures are more often disappointing and EBITDA outlooks are being revised downwards. Single B-rated issuers in the US suffered the most, and underperformed higher quality debt. The volatility and negative sentiment in high yield markets is also weighing on the new issue market, that came in at a meager USD 4 billion for May. Flows were again negative for the month, although dip buyers emerged towards month-end.

All currency risks are hedged.

Robeco High Yield Bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

The fund distributes dividend on a quarterly basis. This fund aims to pay a quarterly dividend of 1.5%. The dividends referred to are target dividends and may be subject to change as a result of market conditions.

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.

Robeco High Yield Bonds is an actively managed fund that invests in high yield corporate bonds. The selection of these bonds is mainly based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, and engagement. The fund invests in corporate bonds with a sub-investment grade rating, issued primarily by issuers from developed markets (Europe/US). The portfolio is broadly diversified, with a structural bias towards the higher rated part in high yield. 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 index 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 management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.