Robeco SDG Credit Income IBx USD

Evert Giesen is Portfolio Manager Investment Grade in the Credit team. Previously, he was an Analyst, responsible for covering the Automotive sector within the Credit team. Prior to joining Robeco in 2001, Evert worked at AEGON Asset Management for four years as a Fixed Income Portfolio Manager. He has been active in the industry since 1997 and holds a Master's in Econometrics from Tilburg University. Jan Willem Knoll is Portfolio Manager Investment Grade in the Credit team. He joined the Credit team in 2016. Previously, Jan Willem headed the Financials Equity sell-side research team at ABN AMRO. He started his career in the industry in 1999 at APG, where he held several positions including Portfolio Manager of a global insurance portfolio and subsequently a pan-European financials portfolio. Jan Willem holds a Master’s in Business Economics from the University of Groningen 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.

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.

Sustainability is incorporated in the investment process by the means of a target universe, exclusions, ESG integration, and a minimum allocation to ESG-labeled bonds. The fund solely invests in credits issued by companies with a positive or neutral impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). In addition, 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 of financially material ESG risk on the issuer's fundamental credit quality. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where a credit issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion.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 Bloomberg Customized BBB-BB rated Global Corporate index, 1-7 years.

August saw significant volatility in global financial markets, triggered by a weak US jobs report that raised fears of a potential economic downturn. The VIX briefly surged to March 2020 levels, while Japan's TOPIX dropped over 12% in a single day. In credit markets, there was also a widening in spread levels, but this was short-lived. Despite initial turmoil, investor sentiment improved after positive data and a dovish speech from Fed Chair Powell, driving a recovery in both US equities and government bonds. Most government bond markets had a strong month, with 5-year Treasury yields declining 21 bps to 3.70%. In investment grade markets, both USD and EUR primary markets saw record-high issuance volumes during August, driven by strong investor demand for new deals to lock in relatively high yields. High yield primary markets were much calmer in August. Global High Yield Index spreads tightened 10 bps to 3.83% and spreads on the Bloomberg Global Aggregate Corporates Index rose 1 bps to 1.02%. In emerging markets, the CEMBI spread declined 10 bps to 2.69%.

Based on transaction prices, the fund's return was 1.38%. The portfolio total return was positive in August, with duration exposure being the largest driver. However, credit exposure also made a decent positive contribution. In the banking space, positive credit contributions were mainly driven by the CoCo positions. Senior and Tier-2 positions made a neutral contribution over the month. The majority of credit contributions came from industrials and utilities in August. Thames Water was the biggest positive contributor as the bonds rallied in August. Exposure to Thames Water was sold after the recovery in bond prices in August. Other strong contributors were Cellnex, Schaeffler and Albertsons.

With continuing economic strength and inflation gradually coming down, our base is that credit markets will trade sideways in the coming period. This relatively benign scenario has been recognized by markets and many areas of the market trade at historical tight levels. Markets are sensitive to tail risks as the turmoil after the French election announcement illustrates. At the moment, not a lot can be gained from taking risk via directional calls on the market. However, there are still areas of the market where value can be found. In the coming quarter, issuer selection will remain key. Although we have seen a decline in treasury yields in recent months, all-in yield continues to look attractive. Given the continued strength of the economy, a large spike wider in spreads seems unlikely. In case of a more substantial weakening of the economy, we expect treasury yield exposure to protect total returns.