Robeco High Yield Bonds CH USD

The global high yield market posted another positive total return in April. The 1.4% return was entirely on the back of spread tightening, as underlying government bonds finished the month slightly higher. Spreads tightened almost 40 bps to a level of 362 bps. In April we witnessed some setback on macro headlines, with weaker data coming from Europe and the US. The 3.2% GDP growth in the US looked promising but the underlying components such as imports and consumer demand showed weakness. Later in the month, sentiment was helped by the Fed striking a tone that was less dovish than expected. Earnings season held up pretty well with numbers that on balance were better-than-expected. Primary issuance continued to be strong. An interesting observation when looking at both markets is that primary issuance in the US is similar to last year's, but European primary is down by 35%. Fund flows continue to make their way into the asset class, taking considerable market share from the leveraged loan market. Global high yield bond spreads and yields tightened, the spread level is 362 bps with an average yield of 5.58%.

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 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.

Robeco High Yield Bonds invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers. The portfolio is broadly diversified across circa 250 issuers, with a structural bias to the higher rated part in high yield (BB/B). Performance drivers are the top-down beta positioning as well as bottom-up issuer selection. The fund aims to outperform its index Barclays US Corporate High Yield & Pan European High Yield ex Financials 2.5% Issuer Cap. The index excludes high yield financials based on relatively high systematic risk, and 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 analysts research reports are being discussed in approx. 500 credit committees per year. In addition, a proprietary quant issuer selection model is used as an independent performance driver. The portfolio managers are responsible for the portfolio construction. A proprietary developed risk management approach avoids high risk concentration in the portfolio. Holdings in equities can only appear in the portfolio as a result of corporate actions and/or debt restructuring. It is not the intention of the portfolio manager to use options or swaptions. As the investment process is well-structured and proven over time, it contributes to repeatable performance delivery. The Robeco High Yield fund is managed by our credit team which consists of eight portfolio managers and thirteen credit analysts. Within the team, Sander Bus and Roeland Moraal are responsible for high yield. Sander has been involved in the fund since inception in 1998, Roeland joined in 2003. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team's fundamental research. Duration of the portfolio is managed in line with the index and currency exposure is hedged.

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