Robeco Corporate Hybrid Bonds IH USD

The Global Corporate Hybrids Index delivered a total return of +0.37% last month. The credit spread on the global hybrid index tightened 18 bps to a level of 188 bps. As a result, corporate hybrids outperformed treasury bonds. The yield on 10-year German treasuries increased 17 basis points to -0.18% at the end of the month. US Treasury yields also moved up, with the 10-year rate around 1.51% at the end of the month.Credit spreads tightened in December, reversing the weakness we saw in late November. Concerns about the latest Covid wave in Europe and worries around the new Omicron variant are still playing a role. Central banks seem to be undistracted by the latest Covid wave, as they are gradually becoming less accommodative. The Bank of England surprised the market by raising interest rates in its December meeting. The Federal Reserve confirmed that it will speed up tapering and signaled that it envisions three rate hikes for 2022. The ECB confirmed that the Covid-related PEPP bond purchase program will end in March 2022, but its regular purchase programs will continue.

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.

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 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 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, alongside 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 hybrid 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, 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 so as to ensure that the fund's positions remain within set limits at all times.