Robeco Global Total Return Bond Fund DH USD

Bob Stoutjesdijk is Portfolio Manager and member of Robeco’s Global Macro team. He joined Robeco in 2019. He worked at Shell Asset Management Company as Portfolio Manager Fixed Income Sovereign Credit in the period 2011-2019. Prior to that, he was Portfolio Manager Fixed Income at SNS Asset Management. He started his career as Quantitative Analyst at APG Asset Management in 2008. Bob has a Master’s in Economics & Business from Erasmus University Rotterdam and is a CAIA® Charterholder. Michiel de Bruin is Head of Global Macro and Portfolio Manager. Prior to joining Robeco in 2018, Michiel was Head of Global Rates and Money Markets at BMO Global Asset Management in London. He held various other positions before that, including Head of Euro Government Bonds. Before he joined BMO in 2003, he was, among others, Head of Fixed Income Trading at Deutsche Bank in Amsterdam. Michiel started his career in the industry in 1986. He holds a post graduate diploma investment analyses from the VU University in Amsterdam and is a Certified EFFAS Analyst (CEFA) charterholder. He holds a Bachelor’s in Applied Sciences from University of Applied Sciences in Amsterdam. Stephan van IJzendoorn is Portfolio Manager and member of Robeco’s Global Macro team. Prior to joining Robeco in 2013, Stephan was employed by F&C Investments as a Portfolio Manager Fixed Income and worked in similar functions at Allianz Global Investors and A&O Services prior to that. Stephan started his career in the Investment Industry in 2003. He holds a Bachelor’s in Financial Management, a Master's in Investment Management from VU University Amsterdam and is Certified European Financial Analyst (CEFA) Charterholder.

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.

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.

The fund incorporates sustainability in the investment process via exclusions, negative screening, ESG integration, limits on investments in companies and countries based on ESG performance as well as engagement and a minimum allocation to ESG-labeled bonds. For government and government-related bonds, the fund complies with Robeco’s exclusion policy for countries, excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption', and ensures investments have a minimum weighted average score of 6 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. For corporate bonds, the fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement. Lastly, the fund invests in a minimum of 2.5% in green, social, sustainable and/or sustainability-linked bonds.

In July, credit spreads tightened, reflecting optimism that the economy has weathered inflation and interest rate shocks without significant recessionary pressures. Risky assets were boosted by softer inflation data in key economies, such as the lowest reported core CPI print in the US since February 2021. Despite evidence that inflation is declining, signs of a robust economy and strong labor market placed selling pressure on underlying government bond yields. In response to the economic landscape, the Fed and ECB raised their policy rates by 25 bps. In Asia, the Bank of Japan (BoJ) made a significant policy shift, widening the band for 10-year JGBs, as inflation continued above its target for 14 straight months. In China, the PBoC cut its 7-Day Reverse Repo rate by 10 bps to 1.9%, The BTP-Bund spread tightened in July, which is a reflection of the generally positive risk sentiment in markets. Nonetheless, Spanish paper, after having tightened versus German Bunds as well, gave up the gains after the outcome of the Spanish parliamentary election indicated complex negotiations to form a new government.

Based on transaction prices, the fund's return was 0.05%. The fund posted a negative absolute return in July, as global interest rates moved sideways, while credit spreads tightened. The fund's steepener positions in the United States, Canada, Sweden and New Zealand added to performance, while the contribution from duration was also positive. Credit detracted from performance, given the regional allocations and credit hedges.

The Fed and other DM central banks seem determined to signal a resolve to keep policy rates at their peak levels for a protracted period of time. Nonetheless, with growth data expected to weaken and inflation declining, we believe it will prove difficult to keep policy rates restrictive for many years to come. We therefore expect the narrative for Fed and ECB policy to change to a more neutral and possibly even a dovish stance on interest rates, which will translate into lower bond yields and steeper curves. With regard to the periphery, we have taken a slightly more neutral stance over the past months. We do intend to take a more defensive position again (i.e. increasing the underweight) in case the outlook for risk deteriorates and valuations richen further.