Robeco Investment Grade Corporate Bonds IH EUR

The Corporate ex-Financials Index delivered a total return of -0.27% last month. The average credit spread on the index tightened 9 basis points to 97 bps. As a result, non-financial corporates outperformed treasuries with an excess return of +0.68%. The yield on 10-year German treasury bonds increased 16 bps to -0.41% at the end of the month.Markets were again driven by central banks, the trade war and European politics. Draghi chaired his last governing council meeting at the European Central Bank. No changes were made to monetary policy after last month’s rate cut and the asset purchase program. The US Federal Reserve cut rates again but they are reluctant to do more. Economic data for the US was quite strong and progress was made in the trade negotiations with China. A hard Brexit was avoided, as the UK parliament came close to approving a deal. In the end the date for leaving the EU was postponed to 31 January 2020 and a general election was scheduled for December. Credit markets rallied as the risk of a hard Brexit was priced out of the market.

The fund invests in Euro denominated securities only.

Robeco Investment Grade Corporate Bonds make use of derivatives for hedging purposes. These derivatives are very liquid.

The fund does not distribute dividend. Any income earned by the fund is reflected in its share price. This means that the fund's total performance is reflected in its share-price performance.

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.

Robeco Investment Grade Corporate Bonds provides diversified exposure across circa 80 corporate issuers to the Euro investment grade credit market (corporates only). The fund is excluding exposure to financial companies. The fund contains mainly bonds, and can make use of derivatives very limitedly. The fund aims to outperform its index Barclays Euro-Aggregate: Corporates ex financials 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 analysts' research reports are being discussed in approx. 500 credit committees per year. A proprietary quant model is used to assist in issuer selection. 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.

Risk management is fully embedded in the investment process to ensure that the fund's positions remain within set limits at all times.