Robeco, The Investments Engineers

Opportunity: Credit investing

Seizing the opportunity in the credit market

While segments of the market are leaning towards the prospect of a soft landing, we maintain a more cautious view. The current yield environment continues to be compelling, offering credit investors the benefits of high-quality carry, higher yields, and improved diversification of risks.

Why credits?

The credit asset class offers investors a variety of options with attractive risk-return characteristics.

History shows us that over the long term, corporate bonds have provided diversification and helped to reduce portfolio volatility.

Aside from the diversification benefits, investors have historically allocated to this asset class to benefit accordingly as income return is a substantial driver of longer-term bond returns. With yields still high and rates set to come down, now is an opportune time to pivot to credits.

Joop Kohler - Head of Credit team

Joop Kohler
Head of Credit team

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In the current landscape, a strategic focus on credit instruments aligns with market conditions and offers a balanced approach to risk and return

Why now?

While markets have fully embraced a soft-landing scenario, we believe that the risk of a recession remains high after such a strong rate hike cycle by central banks. In this environment we believe that investment grade and cross-over (BB-rated) credit offers good value compared to cash, government bonds, and equities. Investment grade companies are better positioned to absorb higher interest rates and potentially offer an attractive yield and income to investors.

Defining fair value in global credit markets

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Why Robeco?

We’ve been corporate bond investors since the 1970s and were one of the first European investors to launch a global high yield credit strategy. We’re also an industry leader in sustainable credits investing, with ESG and SDG integration as well as climate-focused credit strategies.

Contrarian approach

Our style is contrarian, value-focused and research-driven. The success of this style relies on our in-depth research capabilities. Robeco’s international team of analysts has the research skills, global sector expertise and sustainable investing knowledge necessary to help the portfolio managers to select the best opportunities.

Sustainability included

Robeco has long been a leader in SI. Our rigorous sustainability checks and balances help us make better-informed investment decisions.

Our solutions

Some segments of the credit market are particularly interesting in the current market environment: short maturity credits benefit from additional credit spreads with only limited duration risk; investment grade credits, which are the least vulnerable in case of a recession; and high-quality crossover credits, which offer an attractive yield pickup while being well-positioned in case of increased credit volatility.

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Short maturity

Short maturity

Robeco Global Credits - Short Maturity. This strategy invests globally in short-dated investment grade credit corporate and financial credit to limit interest rate and spread risks.

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Investment grade

Investment grade

Robeco Global Credits. This strategy invests globally in investment grade corporates and financials and can invest outside of the standard index.

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Crossover credit

Crossover credit

Robeco SDG Credit Income. This multi-asset credit strategy invests primarily in short-dated and high-quality investment grade and crossover (BB) credit and screens out companies that have a negative impact on the 17 UN Sustainable Development Goals to enhance the sustainability profile of the portfolio.

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High yield

Robeco High Yield Bonds. Successful global high yield capability and track record since 1998. The strategy is known for its conservative and contrarian investment style with a structural underweight in CCC-rated issuers.

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