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Robeco Corporate Hybrid bonds IH EUR

Index: Bloomberg Barclays Global Corporate Hybrids 3% Issuer Cap (hedged into EUR)
ISIN: LU1700711663
  • Investing in subordinated bonds with a high yield, issued by non-financial companies with an investment grade rating.
  • Corporate hybrids offer attractive valuations within fixed income.
  • Corporate hybrids have developed into a mature, standardized and diversified asset class.
Assets class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

Robeco Corporate Hybrid Bonds invests in global corporate hybrids bonds issued by non-financials. The selection of these stocks is based on fundamental analysis. Corporate hybrids are deeply subordinated bonds with equity-like features. The bonds are mainly issued by investment grade issuers. The fund selects the best in class hybrids bonds, with the best risk-return characteristics.

Price development

No performance data available

Price development

Robeco Corporate Hybrid bonds IH EUR

Performance

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The value of the investments may fluctuate. Past performance is no guarantee of future results.
Annualized (for periods longer than one year).
Cumulized (total amount of return).
Performances are gross of fees and based on closing values. In reality, costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown.

Performances are net of fees and based on transaction prices.
Fund Reference index
The value of the investments may fluctuate. Past performance is no guarantee of future results.
Annualized (for periods longer than one year).
Cumulized (total amount of return).
Performances are gross of fees and based on closing values. In reality, costs (such as management fees and other costs) are charged. These have a negative effect on the returns shown.

Performances are net of fees and based on transaction prices.

Performance explanation

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Based on transaction prices, the fund's return was 1.09%. The total return of the fund was +1.19% this month, versus +1.22% for the index. The beta of the fund was just below one during most of the month. In the course of the month, it was lowered a bit due to profit taking on a couple of positions. The beta position made a small negative contribution (-0.07%) to the fund’s return. Issuer selection overall made a positive contribution to performance. The overweights in EDP (Energias de Portugal), Grupo Bimbo, Tennet and EDF made positive contributions. Being underweight in Aroundtown (real estate company) was also a positive factor.

Statistics

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Market development

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The Global Corporate Hybrids Index delivered a total return of +1.22% this month. The average spread on the index tightened 21 basis points to 224 bps at the end of the month. As a result, the global corporate hybrid market outperformed treasuries with an excess return of +1.46%.Risk appetite remained strong during April and credit spreads continued to tighten. The rally accelerated relative to the previous month, driven by positive flows into credit funds. In terms of excess return versus treasuries, corporate hybrids performed in line with the US and European high yield markets.Central bank policy remains the most important driver for markets. The US Federal Reserve has paused its rate hiking cycle, in addition to the end of its quantitative tightening policy. The European Central Bank also indicated there will be no rate hike this year. In the euro hybrid market, a new issuer, LafargeHolcim, issued a perpetual non-call 5 at more than 350 bps over treasuries.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
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ESG integration
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Sustainability Themed Fund

Currency policy

All currency risks are hedged.

Derivative policy

Robeco Corporate Hybrid bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

Dividend policy

This share class of the fund will not distribute a dividend.

ESG Integration policy

The prime goal of integrating ESG factors in our analysis is to strengthen our ability to assess the downside risk of our credit investments. Our analysts include RobecoSAM sustainability data and use external sources to make an ESG assessment as a part of the fundamental analysis.

Investment policy

Robeco Corporate Hybrid Bonds invests in corporate hybrid bonds issued by non-financials. Corporate hybrids are subordinated bonds, which rank between debt and equity in a company’s capital structure. The fund selects the best in class hybrids bonds, with the best risk-return characteristics. Corporate hybrids are mainly issued by investment grade issuers. The aim of the fund is to provide long term capital growth by investments in corporate hybrids bonds. The fund aims to outperform its benchmark: Bloomberg Barclays Global Corporate Hybrids 3% Issuer Cap. The investment philosophy is based on managing a solid portfolio with a long term view. Top-down beta positioning is based on the outcome of our credit quarterly outlook meeting, in which the team is discussing the fundamental market outlook, valuation of bond markets and market technicals. Bottom-up issuer research is executed by our credit analysts, who execute the fundamental analysis. The portfolio managers are responsible for the portfolio construction. A proprietary developed risk management approach avoids high risk concentration in the portfolio. Duration of the portfolio is managed in line with the index and currency exposure is hedged.

Risk policy

Risk management is fully embedded in the investment process so as to ensure that the fund's positions remain within set limits at all times.

Expectation of fund manager

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We continue to like the asset class on a fundamental basis. We aim for a portfolio beta just below one, as valuations have tightened further. The average option-adjusted spread (OAS) on the global hybrid index stood at 224 bps at the end of the month, down from 305 bps at the start of the year. Hybrids in euros trade at 246 bps (OAS) now, close to the bottom quartile in valuations. Many corporate hybrids we own, trade at spreads around 300 bps over treasuries on a yield-to-call basis. As we like these issuers on a fundamental basis (EDF, TransCanada, Grupo Bimbo, Tennet to name a few) we expect their hybrids to be called on the first call date.

Peter Kwaak
Peter Kwaak

Peter Kwaak

Peter Kwaak is a Senior Portfolio Manager and a member of the Credit team. Prior to joining Robeco in 2005, Mr. Kwaak was employed by Aegon Asset Management for three years as Credits and High Yield Portfolio Manager and at NIB Capital for two years as Portfolio Manager. Peter Kwaak started his career in the Investment Industry in 1998. Mr. Kwaak is a CFA Charterholder and holds a Master's degree in economics from the Erasmus University Rotterdam. Mr. Kwaak is registered with the Dutch Securities Institute.

Team

The Robeco Corporate Hybrid Bonds fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit 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 three dedicated quantitative researchers and four 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.

Details

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Management company
Fund capital
Size of share class
Outstanding shares
ISINLU1700711663
BloombergROCHBIH LX
Valoren38694380
WKN
Availability
1st quotation date1508371200000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

Cost of this fund

Ongoing charges

This fund deducts ongoing charges of
These charges comprise
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Transaction costs

The expected transaction costs are

Performance fee

This fund may also deduct a performance fee of

Extra fees

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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.

Disclaimer

The information contained in the website is solely intended for professional investors. Some funds shown on this website fall outside the scope of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht) and therefore do not (need to) have a license from the Authority for the Financial Markets (AFM).

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