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Robeco Corporate Hybrid bonds M2H EUR

Index: Bloomberg Barclays Global Corporate Hybrids 3% Issuer Cap (hedged into EUR)
ISIN: LU1874123828
  • 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.
Asset class
Current price ()
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Currency EUR
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Dividend payingNo

About this fund

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.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 M2H 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 0.47%. The total return of the fund was 0.70% last month, versus 0.76% for the index. The beta of the fund was just below one during the month. Beta positioning made a negative contribution to the fund's performance. Hybrids clearly outperformed treasury debt, while the fund’s credit beta was below one. Issuer selection made a neutral contribution this month.

Statistics

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Market development

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The Global Corporate Hybrids Index delivered a total return of 0.76% last month. The credit spread on the global hybrid index tightened 15 bps to a level of 185 bps. As a result, the index delivered a positive excess return versus treasuries. Treasury yields also moved down, with the German 10-year yield at -0.21% at the end of the month. The 10-year US Treasury yield dropped more than 10 bps to 1.47%. Corporate hybrids delivered a solid performance this month. The search for yield continued and hybrids were clearly sought after. Supply was not an issue, as several new deals were easily absorbed by the market. Commodity prices point to inflation; oil prices continued to rise this month. This trend provides support for the large energy sector in the hybrid market. Central banks, especially the ECB, remain accommodative for now. They are keen to run the economy hot, and argue that inflation pressures may fade once supply chain problems are solved. In the US, discussions around tapering have started, with the Federal Reserve stating that bond purchases will be discussed if the economy stays strong.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
Engagement
ESG integration
Exclusion
YesNoN/A 
Screening
Integration
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

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.

Investment policy

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 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 like corporate hybrids, as they offer high yields on high-quality issuers. We aim for a portfolio beta close to one in corporate hybrids. We continue to like many hybrids based on fundamentals and valuation. With spreads between 200 and 300 bps hybrids offer a decent cushion against potential volatility. Like most credit markets, hybrid spreads are below long-term averages. But unlike other markets, hybrids have room to tighten further. As Covid vaccines are now distributed globally, economies will benefit as lockdowns will end. Part of this recovery has been priced into credit spreads already.

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
ISINLU1874123828
BloombergROCM2HE LX
Valoren43546288
WKN
Availability
1st quotation date1537228800000
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 0.05% 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

The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise 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.

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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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