RobecoSAM Euro SDG Credits FH 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. It is again 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 only invests in Euro-denominated bonds.

RobecoSAM Euro SDG Credits make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

The fund does not distribute dividend. The fund retains any income that is earned and so its entire performance is reflected in its share price.

In this fund we look for investments with a positive societal impact, whilst generating healthy financial returns. We define impact as an alignment with the UN Sustainable Development Goals (SDGs). We identify and evaluate the impact that specific credits have on the SDGs, and score all the issuers under coverage of the analysts’ team. These scores categorize credits as having either a Positive, Neutral, or Negative impact on the SDGs. The scores are then used in a screening process, to define the investable universe that exclude credits with a Negative impact on the SDGs. In addition to the universe screening, our credit analysts integrate ESG factors in their analysis of the companies fundamental credit quality to strengthen our ability to assess the downside risk of our credit investments. Furthermore the portfolio’s environmental footprint is actively reduced and a part of the portfolio is allocated to green bonds.

RobecoSAM Euro SDG Credits provides a diversified exposure to the Euro investment grade credit market. The selection of the bonds is based on fundamental analysis. The fund applies a screening process to select issuers that contribute to realizing the UN Sustainable Development Goals (SDGs) goals. The methodology used in the screening process assesses the SDG contribution of all companies it invests in to create the fund’s investable universe. The fund excludes companies that contribute negatively to these goals. Engagement, ESG Integration and Robeco's exclusion policy also form part of the investment policy. Following the screening process, the fund is actively managed. The fund can take some off-benchmark positioning in emerging markets, covered bonds and a limited exposure to high yield bonds. 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 analyst research reports are being discussed in approx. 500 credit committees per year. 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 positions always meet predefined guidelines.