Robeco Corporate Hybrid bonds IH USD

The global hybrid index delivered a total return of -0.24% last month. The credit spread on the global hybrid index tightened 10 bps to a level of 212 bps. As a result, the index delivered a positive excess return versus treasuries. Interest rates moved up quite sharply around the world. The German 10-year yield was up 26 bps to -0.26%, while the 10-year US Treasury yield moved up 33 bps to 1.40%.The corporate hybrid market was quite strong in February, moving in line with credit markets globally. Towards the end of the month hybrid spreads widened, as the interest rate volatility increased, which also had a negative effect on equity markets. Additional fiscal stimulus in the US coupled with hopes of post-vaccination economic recovery has led to a sharp rise in nominal government bond yields across developed markets. Central bankers in the US and Europe have noted the volatility in rates markets, but have not yet confirmed any measures to intervene. The political situation in Italy was stabilized, as former ECB President Mario Draghi took office as prime minister.

All currency risks are hedged.

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

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

Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.

Robeco Corporate Hybrid Bonds is an actively managed fund that invests in global corporate hybrids bonds issued by nonfinancials. The selection of these bonds is based on fundamental analysis.The fund's objective is to provide long term capital growth. The fund aims for a better sustainability profile compared to the Benchmark by promoting certain ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, next to engagement. 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.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, whilst still controlling relative risk through the applications of limits (on currencies and issuers) to the extent of 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 so as to ensure that the fund's positions remain within set limits at all times.