Robeco Investment Grade Corporate Bonds IH EUR

The Corporate ex-Financials Index delivered a total return of -0.34% this month. The average credit spread on the index widened 19 basis points to 107 bps. As a result, the investment grade corporate market underperformed treasuries by 110 bps. The yield on 10-year German treasury bonds moved down 17 bps to -0.60% at the end of the month.Sentiment changed drastically in the last week of the month. Until then the coronavirus was more or less ignored by markets. This changed as it became clear that contagion had reached Italy and other European countries. In the same week it became clear that the economic impact of the Chinese measure to contain the virus was large. The Chinese manufacturing PMI dropped to the lowest point in decades. Global equity markets tumbled and credit spreads widened. Part of the negative impact of this spread widening was offset by a decline in underlying government bond yields. The European Central Bank added EUR 6 billion to its corporate bond holdings. The size of its corporate sector portfolio was close to EUR 195 billion at the end of the month.

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.