Robeco Euro SDG Credits IEH CHF

Jan Willem de Moor is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2005, he worked at the Dutch Medical professionals’ pension fund as an Equity Portfolio Manager and at SNS Asset Management as an Equity Portfolio Manager. Jan Willem has been active in the industry since 1994. He holds a Master's in Economics from Tilburg University. 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. The Robeco Euro SDG Credits fundis 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.

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 10% 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 Euro Aggregate: Corporates.

In July, the French elections resulted in a surprising win of the left-wing alliance NFP, although no party achieved an absolute majority. The market's initial reaction was muted, suggesting that worst-case scenarios had been avoided. Meanwhile, concerns are growing about a potential softening in consumer and labor markets, coinciding with the start of the second-quarter earnings season. There were indications of weakness in the luxury market in China, with companies like LVMH and Kering reporting a marked deceleration in revenues in the region. In the United States, President Joe Biden decided not to seek re-election, with current Vice President Kamala Harris stepping in as the Democratic candidate and narrowing the gap against Donald Trump in opinion polls. In Europe, the Eurozone composite PMI for July fell to 50.1 from 50.9 in June, signaling economic stagnation and missing consensus expectations. This economic slowdown, coupled with weakening consumption, supports the likelihood of a 25 basis point interest rate cut by the ECB in September. Overall, these factors contribute to expectations of further monetary easing in response to the slowing economy.

Based on transaction prices, the fund's return was 1.42%. This month, the Euro Aggregate Corporate Bond Index posted a return of 1.72% (in euro terms), with excess returns at 0.52%. The yields on underlying government securities narrowed over the period, including a 20-basis-point decline in German 10-year yields, which reached 2.30% by the end of the month. Additionally, the index's credit spread rallied by 9 basis points to finish at 110 basis points. The underlying portfolio performed neutral to its benchmark index before fees. 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, close to neutral performance was achieved from our issuer selection.

For IG portfolios, we target a small overweight position in terms of risk relative to the benchmark. We maintain an overweight in the banking sector, given strong fundamentals combined with superior relative valuation. Recent developments in Europe may well lead to underperformance in the French banks in the near term, but we see little reason for this to ultimately evolve into something truly systemic. We believe we will derive outperformance from deep research-driven name selection opportunities in the near term, as opposed to beta management. We intend to maintain 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.