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Robeco Euro Government Bonds 2FH EUR

Index: Bloomberg Barclays Euro-Aggregate: Treasury (EUR)
ISIN: LU1241712295
  • Outspoken active and adaptive approach
  • Country allocation main performance driver
  • Active duration and yield curve positioning
Assets class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

Robeco Euro Government Bonds invests only in euro-denominated government bonds. The selection of these bonds is based on fundamental analysis. The fund invests in euro denominated bonds issued by the EMU-member countries. It employs an investment process combining top-down and bottom-up elements. Fundamental analysis is performed on each of the three performance drivers: country allocation, duration (interest-rate sensitivity) management and yield curve positioning. Country ESG scores are part of our bottom-up analysis. This share class hedges the duration of the portfolio to approximately two.

Price development

No performance data available

Price development

Robeco Euro Government Bonds 2FH 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 0.28%. The fund posted a slightly negative return in September. Bond yields initially rose considerably as ECB governing council members sounded optimistic on inflation and growth in the Eurozone. The market perceived this as hawkish and expectations for the first ECB rate hike were brought forward with 3 months, from December to September next year. The relative underweight duration position benefited the fund as yields rose. Country positioning had a mixed effect on performance. Initially, our bias to be constructive on peripheral risk was positive for performance, as improved sentiment about 2019 Italian budget expectations supported peripheral markets. However, at the end of the month, the announcement of a surprisingly large Italian deficit target eroded confidence of investors and Italian government bonds gave up much of their gains whilst German bunds benefited.

Statistics

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Market development

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For most government bond markets, September was a negative month. US Treasuries were down 1.2%, JGBs lost 0.3% and Bunds returned -0.9%. Among the larger bond markets, Italy was the exception, with a return of +1.8%. The sell-off in bonds was initiated by a jump in hourly earnings in the US labor market report. Earnings rose 2.9% in August, the highest number since 2009. Surprisingly optimistic comments on inflation by ECB president Draghi were another catalyst for the sell-off. The rise in negotiated wages to 2.2% in the euro area probably helped to support his confidence. Italian bond markets gaining strength ahead of the release of the budget plans also helped to push German yields higher, although that optimism was battered at the end of the month when the actual plans were released.

Fund allocation

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Name Sector Weight
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Fund Classification

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Voting
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ESG integration
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Sustainability Themed Fund

Currency policy

The fund is not exposed to currency risks, as the fund invests in Euro-denominated bonds.

Derivative policy

Robeco Euro Government Bonds makes use of government bond futures. These derivatives are regarded very liquid.

Dividend policy

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. This means that the fund's total performance is reflected in its share price performance.

ESG Integration policy

For Robeco Euro Government Bonds, ESG information of countries is integrated in the investment policy. For a large group of countries an ESG profile is conducted. These profiles are the basis for the 'Country Sustainability Ranking' where we rank countries in terms of ESG performance. The ranking is updated twice a year. Countries are discussed individually in the team, to clearly assess where opportunities and risks are expected. This information is taken into consideration in the investment decisions, in combination with traditional analyses of fiscal and monetary policy. ESG information is especially valuable for decisions regarding country allocation.

Investment policy

The Robeco Euro Government Bonds fund invests in euro denominated bonds issued by the EMU countries. Investing in euro government bonds calls for active management in order to cope with country risks and interest rate risks. The fund performance is driven by multiple drivers, of which country allocation is currently the most dominant. The team is actively allocating across core and peripheral European exposure, and as such investors can benefit from spread movements whilst keeping investment risks under control. The fund aims to outperform its index Barclays Euro-Aggregate: Treasury. The aim of the country allocation decisions is to confront price differences between Eurozone countries with divergences in economic and political developments. Country views can capture either broader trends (for example changes in European policy) or country specific developments. Both are assessed in a structured way, combining top-down (macro environment & policy, valuation, sentiment & positioning) and bottom-up inputs (a country's debt sustainability, macro-economic cycle, ESG profile). Next to country allocation, active duration and yield curve positioning are the other drivers of alpha. Risk budgeting can be adaptive through time in order to capture the most compelling investment opportunities.

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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Economic conditions in the US are strong and the main central banks together have moved from being net buyers to net sellers of bonds. These trends create room for a further rise in yields. In addition, markets could respond to the rising trend in oil prices and the implementation of trade tariffs, which will probably raise the inflation outlook. Still, we doubt the market will factor in a restrictive Fed stance or strong tightening by the ECB. Therefore, we expect a steepening of the US curve and somewhat higher yields for US, core-euro and Japanese government bonds.

Olaf Penninga
Olaf Penninga

Olaf Penninga

Mr. Olaf Penninga is a Senior Portfolio Manager with Robeco's Rates team. Previous affiliations include a position as a Senior Quantitative Researcher with Robeco. Prior to rejoining Robeco in 2002, Olaf was employed by Interpolis as Investment Econometrician for one year. Olaf started his career in the Investment Industry in 1998. He holds a Master's degree in Mathematics (cum laude) from Leiden University.

Team

Robeco Euro Government Bonds is managed within Robeco’s Rates team, which consists of four portfolio managers. The team is focused on government bond strategies including quantitative duration strategies. The investment professionals in the rates team combine portfolio management and research in one function. Furthermore, the team is supported by four dedicated quantitative researchers and four fixed income traders. On average, the members of the rates team have an experience in the asset management industry of sixteen years, of which ten years with Robeco.

Details

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Management company
Fund capital
Outstanding shares
ISINLU1241712295
BloombergROE2FHE LX
Valoren28418125
WKNA2DKL3
Availability
1st quotation date1435190400000
Close financial year31-12
Legal status
Tracking error limit (%)
Morningstar
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

max entry fee
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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.

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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