Robeco High Yield Bonds Feeder Fund - zero duration IH EUR
Solid solution for investing in corporate bonds with a subinvestment grade rating
Every share class of a product invests in the same portfolio of securities and has the same investment objectives and policies. However, their parameters might deviate. For instance and amongst others, their distribution type, currency exposure or fees and expenses might differ. The most common share classes at Robeco are:
a) D/DH shares, which are regular shares and available for all Investors;
b) I/IH shares, for institutional investors as defined from time to time by the Luxembourg supervisory authority.
For more information on share classes please go to the prospectus.
Class and codes
Bloomberg US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap
Under the EU Sustainable Finance Disclosure Regulation, products can be labelled as either Article 6, 8 or 9 fund.
Article 6 - The fund is not in scope of enhanced sustainability disclosures compared to Article 8 and 9.
Article 8 - The fund does not have a sustainable investment objective but promotes environmental or social characteristics and is subject to enhanced sustainability disclosures.
Article 9 - The fund has a sustainable investment objective and is subject to enhanced sustainability disclosures.
Regardless of Article 8 or 9, the companies in which investments are made must follow good governance practices, and sustainable investments must not do any significant harm.
- Performance & costs
- Managed with a conservative approach
- Disciplined and repeatable investment process
- Experienced team management
About this fund
This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.
Total size of fund
Size of share class
Inception date fund
Sander Bus is CIO and Lead Portfolio Manager Global High Yield Bonds. He has been dedicated to High Yield at Robeco since 1998. Previously, Sander worked for two years as a Fixed Income Analyst at Rabobank where he started his career in the industry in 1996. He holds a Master's in Financial Economics from Erasmus University Rotterdam and he is a CFA® charterholder. Roeland Moraal is Lead Portfolio Manager European High Yield in the Credit team. Before assuming this role, he was Portfolio Manager in the Robeco Duration team and worked as an Analyst with the Institute for Research and Investment Services. Roeland started his career in the industry in 1997. He holds a Master's in Applied Mathematics from the University of Twente and a Master’s in Law from Erasmus University Rotterdam. The Robeco High Yield fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team’s fundamental research. Our analysts have long term experience in their respective sectors which they cover globally. Each analyst covers both investment grade and high yield, providing them an information advantage and benefiting from inefficiencies that traditionally exist between the two segmented markets. Furthermore, the credit team is supported by three dedicated quantitative researchers and four fixed income traders. On average, the members of the credit team have an experience in the asset management industry of seventeen years, of which eight years with Robeco.
- Per period
- Per annum
Since inception 06/2018
This ratio measures the risk-adjusted performance and allows the performance quality of different investments to be compared. It is calculated by subtracting the risk-free rate from the fund's returns and dividing the result by the fund's standard deviation (risk). So the Sharpe ratio tells us whether a fund's returns are the result of smart investment decisions or stem from taking extra risk. The higher the ratio, the better, meaning that a greater return is achieved per unit of risk. This ratio is named after its inventor, Nobel Laureate, William Sharpe.
Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread out the data is, the higher the deviation. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk).
Max. monthly gain (%)
The maximum (i.e. highest) absolute positive monthly performance in the underlying period.
Max. monthly loss (%)
The maximum (i.e. highest) absolute negative monthly performance in the underlying period.
The average credit quality of the securities in the portfolio. AAA, AA, A en BAA (Investment Grade) means lower risk and BB, B, CCC, CC, C (High Yield) higher risk.
Option Adjusted Modified Duration (years)
The interest rate sensitivity of the portfolio.
The average maturity of the securities in the portfolio.
Indication of annual charges that are deducted for this fund. This indication is based on the costs over the last calendar year and may vary from year to year. Transaction costs incurred by the fund, any performance fees and other one-off costs are not included in the ongoing charges.
Included management fee
A fee paid by the fund to the asset management company for the professional management of the fund.
Included service fee
This fee is intended to cover official fees, such as the cost of annual reports, annual shareholders' meetings and price publications.
The transaction costs shown are the average annual transaction costs over the last three years calculated in accordance with European regulations.
Fiscal product treatment
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 0.01% 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.
Fiscal treatment of investor
Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual 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.
- Top 10
All currency risks are hedged.
The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund. .
The fund does not distribute dividend.
This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. Through its investment in the Master, the fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, and engagement. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.The majority of bonds selected will be components of the Benchmark, but bonds outside the Benchmark index may be selected too. The Master Fund can deviate substantially from the weightings of the Benchmark. The Master aims to outperform the Benchmark by taking positions that deviate from the Benchmark. The Master Fund aims to outperform the Benchmark over the long run, whilst still controlling relative risk through the applications of limits (on currencies and issuers) to the extent of deviation from the Benchmark. This will consequently limit the deviation of the performance relative to the Benchmark. The Benchmark is a broad market weighted index that is not consistent with the ESG characteristics promoted by the Master Fund.
Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.
Full sustainability-related disclosuresDownload full report
Summary sustainability-related disclosuresDownload summary
The fund incorporates sustainability in the investment process via exclusions, ESG integration, a minimum allocation to ESG-labeled bonds, and engagement. 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. Financially material 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. Furthermore, the fund invests at least 2% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.
After a very strong start to the year for financial markets, we saw that somewhat reverse in February. Although high yield spreads tightened somewhat during the month, the rise in underlying sovereign yields pushed total returns into negative territory. At the beginning of the month, we got a strong US jobs report and unemployment declined to record lows in the US. Although these figures contain good macro news, the data did raise concerns that inflation would prove to be more sticky than previously thought. These concerns were accelerated by an upward revision to the (soft) inflation prints at the end of last year. This led to markets reassessing how fast central banks would react to these inflation figures. Meaning that economic growth would remain strong and the current hiking path would not be sufficient to get inflation figures down. High yield company earnings and guidance continue to lean to the positive in the fourth quarter, which is consistent with the macro narrative. This hawkish sentiment pushed treasuries and Bunds wider. Capital market activity faded a bit, with yields surging. Spreads tightened 11 bps, where yields widened 44 bps respectively and are now 413 bps and 8.30%
Based on transaction prices, the fund's return was 0.17%. The high yield bond index had a negative total return in February at -1.23% on the back of tighter spreads in combination with wider underlying rates. The latter was driven by increased concerns around a hawkish future Fed rate hike policy. The fund underperformed its benchmark this month. The underperformance was mainly driven by our underweight beta, as credit spreads tightened (-10 bps). Our issuer selection made a small positive contribution to performance (+3 bps) for the month. Our quality bias made a negative contribution for the month, as US BBs repriced more viciously on the back of ETF outflow. Our regional overweight Europe versus US was a small contributor, as US spreads underperformed EUR spreads. On an issuer level, we gained by not owning issuers like Rakuten (2 bps), Lumen (4 bps) and Dish Network (1 bps). The largest detractor was having an overweight in Level 3 (-7 bps). This structure underperformed, as top-line figures disappointed market expectations. We did benefit from our overweight in Transocean (+8 bps). This deep sea oil servicing company's revenues are improving on the back of strong increases in day rates, as the sector is going through a recovery phase.
Expectation of fund manager
Our base case is that the US as well as Europe will experience a recession in 2023. Although we expect the recessions to play out to be mutually reinforcing, the root cause will be different. The US is likely to experience a classic boom-bust cycle, whereas the European recession will be driven largely by an energy supply shock. As the probability of a recession rises and becomes part of the consensus view, market dispersion will increase. The lower-quality end of the credit spectrum is likely to see an increased default rate, while the higher end could benefit from lower rates and a flight to quality. Once a recession is fully priced in and spreads reach their own peak, that would be the time to go outright long, even in high yield. Typically, that point is reached well before default rates have peaked. The Fed and the ECB are determined to keep monetary policy tight until they see confirmation that inflation will reach their target. The good news is that inflation has started to moderate, which means the end of the hiking cycle is in sight. But that does not mean the Fed is anywhere close to cutting rates. Beta has decreased a bit as valuations have moved to long-term averages.