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Robeco Euro Government Bonds IH USD

Index: Bloomberg Euro Aggregate: Treasury
ISIN: LU1218873120
  • Outspoken active and adaptive approach
  • Country allocation main performance driver
  • Active duration and yield curve positioning
Asset class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

Robeco Euro Government Bonds is an actively managed fund that invests predominantly in euro government bonds. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.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.

Price development

No performance data available

Price development

Robeco Euro Government Bonds IH USD

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 -4.02%. The fund posted a negative return over the month, below its index. German Bunds rose sharply during April, as inflation continued to creep higher, and broadened out. Risks of so called 'second-round effects' have increased, with employees demanding higher wages to compensate for the price increases. As yields rose, the curve steepened, thereby hurting performance. But as more ECB rate hikes are getting priced in, which will negatively impact economic growth, we think this will lead to curve flattening, similar to what was visible in the US. The overweight in government-related bonds detracted from performance, as swap spreads continued to widen. Although country positions benefited performance, this was not enough to compensate for the impact of the spread widening seen in SSAs and swaps. We expect a normalization of swap spreads later on in the year.

Statistics

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Market development

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Bond yields again rose sharply in April, as inflation pressures continued to take their toll on bond markets. German 2-year bond yields rose by about 0.33% from -0.07% to 0.26%. German 10-year bond yields rose a stunning 0.40% and ended April at 0.94%. A week earlier, 10-year Bunds nearly reached 1%, but yields could decline somewhat, as the market found some support around that level. Italian BTPs suffered in April, as risk sentiment deteriorated and supply concerns around BTPs are mounting. 10-year BTP yields rose to 2.77%, a jump of around 0.70% from March. Inflation in the Eurozone continues to raise eyebrows. The April flash-estimate was announced at 7.50%, stabilizing at the March level, but core inflation was the eye-catcher this time around. Core inflation rose from 2.9% to 3.5%, beating estimates. The ECB sent mixed signals in April. Increasing inflationary pressures were acknowledged, but the ECB continues to take a wait and see approach with regard to rate normalization, thereby increasing market concerns that the ECB is getting more and more behind the curve.

Fund allocation

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Name Sector Weight
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Currency policy

The fund is not exposed to currency risks, as the fund invests in Euro-denominated bonds and derivatives are used to hedge the currency risk to the US Dollar.

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

The fund incorporates sustainability in the investment process via exclusions, negative screening, ESG integration and minimum thresholds for the ESG score of countries as well investments in ESG-labelled bonds. The fund complies with Robeco's exclusion policy for countries and does not invest in countries where serious violations of human rights or a collapse of the governance structure take place, or if countries are subject to UN, EU or US sanctions. In addition, the fund excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption'. ESG factors of countries are integrated in the bottom-up country analysis. In the portfolio construction the fund ensures a minimum weighted average score of 6.5 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. Lastly, the fund invests in a minimum of 10% in green, social or sustainable bonds.

Investment policy

Robeco Euro Government Bonds is an actively managed fund that invests predominantly in euro government bonds. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long-term capital growth. The fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, region-based exclusions and invest partly in green, social or sustainable bonds. 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. 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) 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 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.

Sustainability profile

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Exclusions

ESG Integration

Sustainability

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The fund incorporates sustainability in the investment process via exclusions, negative screening, ESG integration and minimum thresholds for the ESG score of countries as well investments in ESG-labelled bonds. The fund complies with Robeco's exclusion policy for countries and does not invest in countries where serious violations of human rights or a collapse of the governance structure take place, or if countries are subject to UN, EU or US sanctions. In addition, the fund excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption'. ESG factors of countries are integrated in the bottom-up country analysis. In the portfolio construction the fund ensures a minimum weighted average score of 6.5 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. Lastly, the fund invests in a minimum of 10% in green, social or sustainable bonds.

Expectation of fund manager

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The outlook for sovereign bonds remains challenging for now. Inflationary pressures are likely to remain high for some time to come in the Eurozone. Renewed supply bottlenecks, as a result of new lockdown disruptions in China, come on top of the existing energy and food price pressures. In addition, trade unions will demand at least partial compensation for higher inflation. In this environment it is difficult to see bonds rally. Notably, in the Eurozone, inflation expectations are now back at 2012 levels. The ECB has been emphasizing optionality and flexibility when it comes to normalizing its still very accommodative interest rate policy. Nonetheless, the latest ECB signals seem to at least hint at a rate hike in Q3, possibly even in July. Should the ECB deliver on this, it is possible that bond yields can finally find some ground, as market concerns around a de-anchoring of inflation expectations can subside as a result of decisive ECB action.

Michiel de Bruin, Stephan van IJzendoorn
Michiel de Bruin, Stephan van IJzendoorn

Michiel de Bruin, Stephan van IJzendoorn

Michiel de Bruin is Co-Head of the Fixed Income Global Macro team and Co-Manager of Euro Government Bonds. Prior to joining Robeco, Michiel worked for BMO Global Asset Management in London, most recently as Head of Global Rates and Money Markets. He held various other positions before that, including Head of Euro Government Bonds. The roles he fulfilled before joining BMO included Co-Head of Fixed Income Sales and Trading at NIB Financial Markets in Amsterdam. Michiel started his career in the industry in 1986 and he holds a Bachelor's degree from Amsterdam University of Applied Sciences. Mr. van IJzendoorn is a Portfolio Manager in Robeco's Global Fixed Income Macro team. Prior to joining Robeco in 2013, Stephan was employed by F&C Investments as a Senior Portfolio Manager Fixed Income. Before his move to F&C Investments he worked in similar functions at Allianz Global Investors and A&O Services. Stephan started his career in the Investment Industry in 2003. He holds a Bachelor's degree in Financial Management, a Master's degree in Investment Management from the VU University Amsterdam and is CEFA charterholder.

Details

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Management company
Fund capital
Size of share class
Outstanding shares
ISINLU1218873120
BloombergROEGIHU LX
Valoren27851911
WKN
Availability
1st quotation date1432771200000
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

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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.

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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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