RobecoSAM SDG Credit Income BxH HKD

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. 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. Jan Willem Knoll is an Analyst in the Credit team and covers the Financials sector – both banks and insurers. 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.

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.

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 that are relevant 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 [Index name].

In August, the market rally that had started in May ended. Global High Yield Index spreads rose 10 bps to 4.72% and spreads on the Bloomberg Global Aggregate-Corporates Index rose 6 bps to 1.33%. In emerging markets, the CEMBI spread rose 12 bps to 3.38%. The US economy is not showing any signs of a significant slowdown. On a positive note, inflation numbers are coming down but remain above the Fed's target. However, markets fear that rates need to stay higher than previously expected. 5-year Treasury yields rose 7 bps to 4.25. In Europe, economic indicators point to weakness, while inflation numbers remain high. The Chinese economy remains weak and the PBoC cut rates in August. Chinese property developers continue to struggle, but this is not impacting broader markets. August was a relatively quiet month for primary markets and there were few surprises from corporate earnings.

Based on transaction prices, the fund's return was -0.48%. Credit returns made a slightly negative contribution as spreads moved higher. Positions in CoCo bonds contributed negatively. Negative contributors were positions in Deutsche Bank, Barclays and Banco Santander. Ineos Group and Canpack were among the top positive contributors. The overall contribution from duration was slightly negative, as the negative price return was almost fully offset by carry.

Rates and recession fears are the key drivers in this cycle. And although US yields seem close to the cycle peak, volatility and uncertainty remain. Credit spreads are still around their long-term average, but are tighter than earlier in the year. Although we have seen tightening in banking spreads, valuations are still attractive in this part of the market compared to the broader market. During the last few quarters, we added risk when spreads widened and reduced some exposure when spreads tightened. This will continue to be the playbook going forward. After the recent rally, we reduced some risk.