Robeco Financial Institutions Bonds I EUR
Investing in subordinated bonds issued by banks and insurance companies
Every share class of a product invests in the same portfolio of securities and has the same investment objectives and policies. However, their parameters might deviate. For instance and amongst others, their distribution type, currency exposure or fees and expenses might differ. The most common share classes at Robeco are:
a) D/DH shares, which are regular shares and available for all Investors;
b) I/IH shares, for institutional investors as defined from time to time by the Luxembourg supervisory authority.
For more information on share classes please go to the prospectus.
Class and codes
Bloomberg Euro Aggregate Corporates Financials Subordinated 2% Issuer Cap
Under the EU Sustainable Finance Disclosure Regulation, products can be labelled as either Article 6, 8 or 9 fund.
Article 6 - The fund is not in scope of enhanced sustainability disclosures compared to Article 8 and 9.
Article 8 - The fund does not have a sustainable investment objective but promotes environmental or social characteristics and is subject to enhanced sustainability disclosures.
Article 9 - The fund has a sustainable investment objective and is subject to enhanced sustainability disclosures.
Regardless of Article 8 or 9, the companies in which investments are made must follow good governance practices, and sustainable investments must not do any significant harm.
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- Performance & costs
- Diversified exposure to subordinated financial bonds
- Disciplined and repeatable investment process
- No active duration, nor FX exposure
About this fund
Robeco Financial Institutions Bonds is an actively managed fund that mainly invests in subordinated euro-denominated bonds issued by financial institutions. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund offers a diversified exposure to subordinated bonds issued by banks and insurance companies and the focus of the fund is, in general, towards higher rated issuers (investment grade).
Total size of fund
Size of share class
Inception date fund
Jan Willem de Moor
Jan Willem de Moor is Co-Head Portfolio Management 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. The Robeco Financial Institutions Bonds fund 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.
Since inception 05/2011
Tracking error ex-post (%)
The ex-post tracking error is defined as the volatility of the fund's achieved excess return over the index return. In fund management, most managers are subject to an ex-ante (pre-determined) tracking error, which defines the extent of the additional risk they may take when aspiring to outperform the fund's benchmark. The ex-post tracking error explains the distribution of past fund performances compared to those of its underlying benchmark. With a higher tracking error, the fund's returns deviate more from its index's returns, hence there is a greater chance that the fund may outperform. The wider the spread of returns relative to the benchmark, the more "actively" a fund has been managed. In contrast, a low tracking error indicates more "passive" management.
This ratio serves to evaluate the quality of the excess return a fund manager has achieved because it takes the active risk involved into account. The information ratio is defined as the excess return over the benchmark return divided by the fund's tracking error. The higher the information ratio, the better. For example, a fund with a tracking error of 4% and an excess return of 2% over benchmark has an information ratio of 0.5, which is quite good.
This ratio measures the risk-adjusted performance and allows the performance quality of different investments to be compared. It is calculated by subtracting the risk-free rate from the fund's returns and dividing the result by the fund's standard deviation (risk). So the Sharpe ratio tells us whether a fund's returns are the result of smart investment decisions or stem from taking extra risk. The higher the ratio, the better, meaning that a greater return is achieved per unit of risk. This ratio is named after its inventor, Nobel Laureate, William Sharpe.
Alpha measures the difference between a portfolio's actual return and its expected performance, given the level of risk, compared to the benchmark. A positive alpha figure indicates that the fund has performed better than expected, given the level of risk. Beta is used to calculate the level of risk compared to the benchmark..
Beta is a measure of a portfolio's volatility, or systematic risk, in comparison to the benchmark. A beta of 1 indicates that the portfolio will move with the benchmark. A beta of less than 1 means that the portfolio will be less volatile than the benchmark. A beta of more than 1 indicates that the portfolio will be more volatile than the benchmark. For example, if a portfolio's beta is 1.2 it is theoretically 20% more volatile than the benchmark.
Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread out the data is, the higher the deviation. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk).
Max. monthly gain (%)
The maximum (i.e. highest) absolute positive monthly performance in the underlying period.
Max. monthly loss (%)
The maximum (i.e. highest) absolute negative monthly performance in the underlying period.
Months out performance
Number of months in which the fund outperformed the benchmark in the underlying period.
Hit ratio (%)
This percentage indicates the number of months in which the fund outperformed in a given period.
Months Bull market
Number of months of positive benchmark performance in the underlying period.
Months outperformance Bull
Number of months in which the fund outperformed positive benchmark performance in the underlying period.
Hit ratio Bull (%)
This percentage indicates the number of months the fund outperformed a positive benchmark in an underlying period.
Months Bear market
Number of months of negative benchmark performance in the underlying period.
Months outperformance Bear
Number of months in which the fund outperformed negative benchmark performance in the underlying period.
Hit ratio Bear (%)
This percentage indicates the number of months the fund outperformed a negative benchmark performance in an underlying period.
The average credit quality of the securities in the portfolio. AAA, AA, A en BAA (Investment Grade) means lower risk and BB, B, CCC, CC, C (High Yield) higher risk.
Option Adjusted Modified Duration (years)
The interest rate sensitivity of the portfolio.
The average maturity of the securities in the portfolio.
Green Bonds (%)
The percentage of total AuM in the portfolio (market-weight based) that is indicated as Green Bond in Bloomberg. Green bonds are any type of regular bond instrument for which the proceeds will be applied exclusively to environmental projects.
Indication of annual charges that are deducted for this fund. This indication is based on the costs over the last calendar year and may vary from year to year. Transaction costs incurred by the fund, any performance fees and other one-off costs are not included in the ongoing charges.
Included management fee
A fee paid by the fund to the asset management company for the professional management of the fund.
Included service fee
This fee is intended to cover official fees, such as the cost of annual reports, annual shareholders' meetings and price publications.
The transaction costs shown are the average annual transaction costs over the last three years calculated in accordance with European regulations.
Fiscal product treatment
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.
Fiscal treatment of investor
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.
- Top 10
All currency risks are hedged.
Robeco Financial Institutions Bonds fund make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.
This share class of the fund does not distribute dividend.
Robeco Financial Institutions Bonds is an actively managed fund that mainly invests in subordinated euro-denominated bonds issued by financial institutions. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, and engagement. The fund offers a diversified exposure to subordinated bonds issued by banks and insurance companies and the focus of the fund is, in general, towards higher rated issuers (investment grade). The majority of bonds selected will be components of the benchmark, but bonds outside the benchmark may be selected too. The fund can deviate substantially from the weightings of the benchmark. The fund aims to outperform the benchmark over the long run, while still controlling relative risk through the application of limits (on currencies and issuers) to the extent of the deviation from the benchmark. This will consequently limit the deviation of the performance relative to the benchmark. The Benchmark is a broad market-weighted index that is not consistent with the ESG characteristics promoted by the fund.
Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.
Full sustainability-related disclosuresDownload full report
Summary sustainability-related disclosuresDownload summary
The fund incorporates sustainability in the investment process via exclusions, ESG integration, a minimum allocation to ESG-labeled bonds, and engagement. 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. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.
European credit markets started the month strongly with a continuation of the spread rally that we also saw in January. However, sentiment changed after the first week and spreads widened during the subsequent weeks of February. The average index spread still ended the month at a slightly lower level than at the end of January. Underlying government bond yields moved up quite a bit during the month and this was also the main driver for the weaker sentiment in credit markets in the second half of the month. Macro data were the biggest driver for markets this month. Stronger-than-anticipated labor markets in the US, higher-than-expected inflation numbers across the globe and therefore hawkish central bank rhetoric were driving government bond yields higher. Market expectations for future rate hikes have gone up; in the US another 75 bps in rate hikes is now discounted, while in Europe another 150 bps in rate hikes is priced in. The market reaction in equities and credit to this worsened rates outlook can be called relatively calm. A few new deals were issued in February. We participated in new Tier 2 issues of NatWest Group and Sabadell.
Based on transaction prices, the fund's return was -1.24%. The portfolio posted a return that was negative in February. Higher underlying government bond yields were the driver for this negative return. The average index spread ended the month at 256 basis points, which is 2 basis points lower than at the end of January. The index excess return of subordinated bonds over underlying government bonds was therefore positive, at 0.5%. The performance of the portfolio was lower than that of the index. The portfolio had a beta overweight position during the month (circa 1.1). The contribution of this overweight was positive. Issuer selection contributed negatively though. An important factor for this negative contribution was the recovery in spreads for real estate names, where the fund holds an underweight position. Bank and insurance CoCos underperformed on a risk-adjusted basis, which contributed negatively too. The portfolio lost in relative terms through the underweight in Aroundtown and Grand City Properties, and through the overweight in Raiffeisen Bank. Spreads of the latter bank widened after the US asked for more information about the bank's Russia-related business.
Expectation of fund manager
Jan Willem de Moor
A hiking cycle often ends in a recession with rates typically peaking before credit spreads do. Rates have started to come down and may have peaked in some markets, while inflation is now easing. Our base case is that the US as well as Europe will experience a recession in 2023. The US is likely to experience a classic boom-bust cycle, whereas the European recession will be driven largely by an energy supply shock. European swap spreads are still at elevated levels, with 5-year spreads at 65 bps. With increased issuance of sovereign paper and the prospect of quantitative tightening (QT) next year, we expect a further normalization of swap spreads towards long-term average levels of 40 bps. This is helpful for euro investment grade since swap spreads are a large component of the total spread versus governments. Within euro investment grade, financials screen relatively cheap. In past cycles, financials were often seen as high beta since they are a leveraged bet on the economy. This time around, we see banks as less vulnerable since capital buffers have greatly improved and banks are benefiting from an interest rate environment that has finally normalized.