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Robeco Euro Government Bonds IH USD

Index: Bloomberg Barclays Euro Aggregate: Treasury (hedged into USD)
ISIN: LU1218873120
  • Outspoken active and adaptive approach
  • Country allocation main performance driver
  • Active duration and yield curve positioning
Assets class
Current price ()
Performance YTD ()
Currency USD
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.

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 2.73%. Fund returns were boosted by expectations of further monetary easing by the ECB. 10-year German Bunds moved towards new lows and yield spreads of semi-core and peripheral countries versus Bunds tightened across the board. The fund benefited considerably from these developments. Especially country positions added to the performance of the fund. Overweight positions in Italy and in long-dated Belgian and French paper attributed significantly. Other overweights in semi-core such as Finland, and in Dutch DSLs also benefited the fund. Although underweights in Portugal and Spain subtracted, this was more than offset by longs elsewhere. Duration attribution was neutral for the performance. The 10-30 year curve-flattener position added to performance. Supported by ultra-dovish ECB rhetoric the 10-30 year spread tightened.

Statistics

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Market development

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Government bonds continued their positive momentum in June. Italy led the rally with a return of 3.7%, followed by Spain (2.7%). Despite low yield levels, German Bunds still gained 0.7%, while US Treasuries were up 1.1%. Central banks played a role in stimulating the demand for bonds. In his Sintra speech of mid-June, ECB President Draghi lived up to his reputation and managed to exceed market expectations once more. The bar for further policy action was laid low. All tools clearly are on the table, including rate cuts and a restart of QE. The Fed also surprised on the dovish side in its June meeting. FOMC members lowered their expectations on inflation and on the Fed funds rate and in his comments Fed chair Powell opened the door for a rate cut in July. A weak payrolls figure for June and continued modest inflation data further added to the expectation that the Fed will cut interest rates.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
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ESG integration
Exclusion
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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 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

In our government bond portfolios, the active country allocation is based on a combination of top-down and bottom-up analysis. In the bottom-up analysis, besides debt sustainability and economic cycle, ESG criteria are an integral part of our analysis. For our top-down analysis, our in-house developed RobecoSAM Country Sustainability Ranking (CSR) is used in our country allocation decisions. The CSR acts as an early-warning system which helps us to identify problems as well as opportunities in countries well before they are reflected in spreads, or are picked up by the rating agencies.

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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Central banks have committed themselves to pursue a more accommodative monetary policy and they will now be forced to deliver. This implies lower rates for longer which is manifesting itself in a hunt for yield. Yields will probably continue to decline, curves will flatten and spreads will tighten as a result. Speculation of renewed ECB asset purchases only adds to demand for yielding assets in the euro area and explains why the momentum in, for example, Italian BTPs is likely continue notwithstanding a lack of improvement in the fundamentals.

Michiel de Bruin, Stefan van IJzendoorn
Michiel de Bruin, Stefan van IJzendoorn

Michiel de Bruin, Stefan 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

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 0.01% 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.

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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