Robeco Climate Global Credits IBH JPY

Peter Kwaak is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2005, he was Portfolio Manager Credits at Aegon Asset Management for three years and at NIB Capital for two years. Peter has been active in the industry since 1998. He holds a Master’s in Economics from Erasmus University Rotterdam and he is a CFA® charterholder. Reinout Schapers is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2011, Reinout worked at Aegon Asset Management where he was a Head of European High Yield. Before that, he worked at Rabo Securities as an M&A Associate and at Credit Suisse First Boston as an Analyst Corporate Finance. Reinout has been active in the industry since 2003. He holds a Master's in Architecture from the Delft University of Technology. Matthew Jackson is Portfolio Manager Global Investment Grade in the Credit team. He joined Robeco in 2024 from Western Asset Management in London where he started his career in the industry in 2003 and consequently held roles of Risk Analyst, Portfolio Analyst, Research Analyst and Portfolio Manager of numerous dedicated credit funds and mandates. He holds a Bachelor’s in Economics (Hons) from the University of Sheffield. The Robeco Climate Global Credits is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts (of which four financials 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 dedicated quantitative researchers and 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.

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.

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.

The fund’s sustainable investment objective is to contribute to keeping global temperature rise well-below 2°C by reducing the carbon footprint of the fund. Climate change and sustainability considerations are incorporated in the investment process via exclusions, ESG integration, a minimum allocation to ESG-labeled bonds and a carbon footprint target. The fund does not invest in companies that are in breach of international norms and applies the activity-based exclusions of Article 12 of the EU regulation on Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks as per Robeco’s exclusion policy. ESG factors, including climate change, are integrated in the bottom-up security analysis to assess the decarbonization potential and the impact of financially material ESG risks on the issuer's fundamental credit quality. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. In the portfolio construction the fund targets a carbon footprint at least equal to or better than the Solactive Paris Aligned Global Corporate Index. This is to ensure the fund is aligned with the desired decarbonization trajectory of an average 7% year on year.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on Solactive Paris Aligned Global Corporate Index.

July was a month marked by contrasting events. Initially, there was excitement over the mixed outcome of the French elections. However, this enthusiasm was dampened by signs of a weakening consumer market, a slowing labor market, and softer inflation figures. In the latter half of the month, treasury yields fell, the equity market declined, and credit spreads widened. Second-quarter earnings revealed weakness in China's luxury market, with companies like LVMH and Kering reporting lower revenues. In the United States, President Joe Biden decided not to seek re-election, with Vice President Kamala Harris stepping in as the Democratic candidate. The soft inflation print surprised to the downside, increasing the likelihood of a Fed cut by September and further cuts until the end of the year. The FOMC's opening statement highlighted risks to both sides of its dual mandate, implying a greater focus on the labor market. Geopolitical tensions rose in the Middle East, driving up freight rates and oil prices. In Europe, markets continued to experience weaker economic growth and consumption, supporting the likelihood of the ECB cutting its interest rate by 25 basis points in September.

Based on transaction prices, the fund's return was 1.67%. The Paris-Aligned Global Corporate Index return was 2.11% this month (EUR, hedged). Credit spreads widened in both USD and EUR investment grade markets. Despite this move, total returns were positive. Underlying treasury yields moved down in the US and in Europe. The portfolio return was 2.02 % this month (EUR, hedged). Relative performance is attributed to beta positioning and issuer selection, in line with our investment process. The beta contribution was neutral due to our beta being close to 1 throughout the month. As a result, all of the performance in July stemmed from our issuer selection. Positions in Warner Bros Discovery, Vodafone and ZF Friedrichshafen cost us performance, As well as underweight positions in Thames Water and Aroundtown. Banking and insurance positions contributed positively, partly due to the continuation of the recovery of French credits after the stalemate election outcome. The net result from credit selection was negative.

We remain comfortable with investment grade credit, but are cautious on lower rated segments such as high yield bonds and bank Tier-1 capital. Spreads are especially low in the US credit market, both in high yield and investment grade. We see pockets of value in European investment grade. We continue to target beta's just above neutral in investment grade credit funds. In global funds, we maintain our overweight Euro versus underweight USD positioning. We intend on maintaining a conservative stance regarding overall risk in portfolios. Recency bias is a powerful thing and we have seen numerous episodes in the past 20 years where investors become too comfortable with the idea that low volatility and unattractive valuation can persist indefinitely. It rarely does. By employing a patient and disciplined approach, we will be in a strong position to capture more compelling opportunities as they arise.