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Robeco High Yield Bonds Feeder Fund - zero duration D3H USD

Index: Bloomberg Barclays US Corporate High Yield+ Pan Euro HY ex Financials 2.5% Issuer Cap
ISIN: LU1874123315
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Asset class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingYes

About this fund

This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.

Price development

No performance data available

Price development

Robeco High Yield Bonds Feeder Fund - zero duration D3H USD

Performance

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The value of the investments may fluctuate. Past performance is no guarantee of future results.
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
The value of the investments may fluctuate. Past performance is no guarantee of future results.
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

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Based on transaction prices, the fund's return was -0.15%. The fund outperformed its benchmark by 10 bps in July, thus reducing the year-to-date underperformance to roughly -0.40%. The year-to-date underperformance stems from our beta underweight, as we retain a clear quality bias. In July, the beta underweight delivered a small plus. Issuer selection results are positive on a year-to-date basis, and also in July. USD BB outperformed B and CCC on a risk-adjusted basis in July, a small positive for the fund. Laggards on a sector basis in July were energy , communications and transportation, in which we are underweight. Hospital operator HCA, a large position, performed strongly on yet another ratings upgrade. Not owning some of the riskier energy and cruise liner names such as Carnival and Norwegian Cruise Line also added a tad. The global chip shortage has led to a nice rally in car rental bonds: with new car production constrained, used car prices have risen sharply. This benefits the likes of Europcar and Avis, two of our large positions, as these companies own big fleets that now fetch much higher sales prices. Rental companies are also able to charge much higher prices given the shortage in vehicles.

Statistics

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Market development

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High yield bond markets managed to generate another positive total return, for the ninth month in a row. For July, the return driver was the underlying decline in government bond yields. High yield spreads actually widened over the month, resulting in a small negative credit excess return. Since the start of 2021, spreads declined by about 50-60 bps, resulting in more than 400 bps of credit excess return over treasuries. USD HY underperformed EUR HY in July by a small margin, but has performed much better on a YTD basis.The big theme in July was the move in treasury yields. The 10-year US Treasury yield declined further, from 1.45% to 1.22%. With all-in yield levels of close to 4% in the US and approaching 3% in Europe, borrowing for high yield-rated companies has never been this cheap. Unsurprisingly, primary activity remains very busy. July was once again a record-breaking month. After only seven months, US HY issuance is already higher than in all but four full calendar years we had so far. With such easy access to capital, defaults remain scarce. In the past month, not a single default was recorded. The default rate is approaching 1%, way below the long-term average of 3.5-4.0%.

Fund allocation

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Name Sector Weight
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Currency policy

All currency risks are hedged.

Derivative policy

The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund. .

Dividend policy

This share class of the fund will 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

This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. Through its investment in the Master, the fund aims for a better sustainability profile compared to the Benchmark by promoting certain ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, next to engagement. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.The majority of bonds selected will be components of the Benchmark, but bonds outside the Benchmark index may be selected too. The Master Fund can deviate substantially from the weightings of the Benchmark. The Master aims to outperform the Benchmark by taking positions that deviate from the Benchmark. The Master Fund aims to outperform the Benchmark over the long run, whilst still controlling relative risk through the applications of limits (on currencies and issuers) to the extent of 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 Master Fund.

Risk policy

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

Sustainability profile

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Exclusions

Full ESG Integration

ESG integration policy

{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}

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.

Expectation of fund manager

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The year 2021 has thus far developed into a full-swing recovery year, with confidence indicators up, GDP on a mega-swing back and year-on-year headline inflation numbers rising sharply, all of which has been helped by extremely loose fiscal and monetary policies. So far, high yield markets have embraced the recovery and ignored any potential warning signs. The risk of overheating the economy and letting inflation slip out of control is there, but markets firmly bet on the narrative of inflation spikes being a transitory year-on-year effect after the sudden stop the economy experienced in 2020. ‘All signs on green’ has become the widely shared view for credit. This is a market that no longer compensates for tail risks and which is vulnerable to negative surprises. Confirmation biases rule. At times like these, it is best to be humble about the unknowns and to just accept that, every now and then, it is difficult to see the forest for the trees.We are staying firmly on the cautious side, with a preference for quality names and clear survivors. Given the very low dispersion in markets, it does not pay to reach out for the riskier names. We are running an underweight beta as a result.

Sander Bus, Roeland Moraal
Sander Bus, Roeland Moraal

Sander Bus, Roeland Moraal

Sander Bus is Co-Head of the Credit team and Lead Portfolio Manager Global High Yield Bonds. He has been dedicated to High Yield at Robeco since 1998. Previously, Sander worked for two years as a Fixed Income Analyst at Rabobank where he started his career in the industry in 1996. He holds a Master's in Financial Economics from Erasmus University Rotterdam and is a CFA® charterholder. Mr. Roeland Moraal, Vice President, CEFA, Portfolio Manager. Roeland is a Senior Portfolio Manager High Yield within Robeco's Credit team since January 2004. Before assuming this role, he was portfolio manager in our Rates team for two years and worked as an analyst with the Institute for Research and Investment Services for three years. Roeland Moraal is Lead Portfolio Manager European High Yield in the Credit team. Before assuming this role, he was Portfolio Manager in the Robeco Duration team and worked as an Analyst with the Institute for Research and Investment Services. Roeland started his career in the industry in 1997. He holds a Master's in Applied Mathematics from the University of Twente and a Master’s in Law from Erasmus University Rotterdam.

Team

The Robeco High Yield fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit 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 three dedicated quantitative researchers and four 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

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Management company
Fund capital
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Outstanding shares
ISINLU1874123315
BloombergROHYD3H LX
Valoren43545774
WKN
Availability
1st quotation date1537228800000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

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This fund deducts ongoing charges of
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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.

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Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

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