Robeco High Yield Bonds IH USD

Risk assets experienced a typical year-end rally, with both equities and high yield fully retracing the weakness of November. The driver was the market perception that Omicron will be less severe than initially feared. The global high yield market posted an impressive credit excess return of 2%. Spreads moved from close to the peak to the lower end of the 2021 range of 270-360 bps and ended the year at 290 bps. Meanwhile, Treasury rates were on the rise again in both Europe and the US, dampening total returns in high yield. Inflation continues to be a top-of-mind concern for investors. The hawkish Fed pivot, whereby up to three rate hikes in 2022 are being signaled, led Treasury yields to rise to 2021 peak levels, especially on the front end. Similarly in Europe the ECB announced the end of one of its QE programs, but it still needs to wind down its regular program before thinking about rate hikes. Over the full year, global HY posted a total return of around 4.2% in EUR (5.2% in USD), a combination of a coupon year whereby positive excess return from tightening spreads was counterbalanced by a negative return contribution from rising underlying government bond yields.

All currency risks are hedged.

Robeco High Yield Bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.

The fund incorporates sustainability in the investment process via exclusions, ESG integration 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. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.

Robeco High Yield Bonds is an actively managed fund that invests in high yield corporate bonds. The selection of these bonds is mainly based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund promotes certain ESG (environmental, social and corporate governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, and integrates ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list based on controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries. The fund invests in corporate bonds with a sub-investment grade rating, issued primarily by issuers from developed markets (Europe/US). The portfolio is broadly diversified, with a structural bias towards the higher rated part in high yield. Performance drivers are the top-down beta positioning as well as bottom-up issuer selection. The majority of bonds selected will be components of the benchmark, but bonds outside the Benchmark index 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.