Robeco Investment Grade Corporate Bonds ZH EUR

Market sentiment changed somewhat during September. Early in the month equity markets weakened, as technology stocks came under pressure after months of outperformance. Credit spreads remained stable at first, but widened a bit in the second half of the month. This was mainly driven by sharp increases in new Covid-19 cases in several countries, leading to concerns about a second wave. Once again, it is clear that some countries are suffering much more than others. Spain is one of the European countries that is hit hard again and this is weighing negatively on the banking sector. Mergers in the Spanish banking sector remain a theme as CaixaBank announced the acquisition of Bankia, while Sabadell and BBVA were also mentioned. The market fears another lockdown scenario which would hurt the economic recovery. But investors also take comfort from continued support from central banks and governments. The ECB was again very active in the market with its corporate purchase program. As a result, many bonds have recovered most of the losses incurred earlier this year. But for the sectors that are most impacted by the virus, like hotels and airlines, the year-to-date spread performance is still negative.

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.