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Robeco Euro Government Bonds ZH EUR

Index: Bloomberg Barclays Euro-Aggregate: Treasury (EUR)
ISIN: LU0301741277
  • 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.

Price development

No performance data available

Price development

Robeco Euro Government Bonds ZH EUR

Performance

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Fund Index
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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 1.04%. The fund benefited strongly from the rally in EGBs as supported by the broad global risk-off sentiment, 10-year Bund yields rallied to a new historic low. The bias to an – albeit small – underweight duration position subtracted from performance. We reduced the underweight as US-China trade tensions started to escalate, which mitigated some of the adverse impact. The 10-30s flattening position in Bunds modestly added to performance. Although the hunt for yield increased, the demand for long-dated paper remained subdued for most of the month. Towards the end of the month, long-dated paper started to catch up. Positions in long-dated Belgium and France subtracted slightly, as spreads versus Bunds widened. The fund benefited from the underweight in Italian risk, expressed in duration terms and through a 10-30s BTP flattener. BTPs lagged the broader market significantly. The underweight in Spain subtracted from returns as supported by a relatively benign election outcome, SPGBs defied the risk-off sentiment.

Statistics

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Above mentioned ratios are based on gross of fees returns
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Market development

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Government bonds rallied strongly in May, with US Treasuries posting a return of 2.3% and German Bunds up 1.5%. German 10-year yields closed below -0.20% on 31 May, the lowest month-end close on record. The main driver of bond returns was the unexpected derailing of trade talks between the US and China. Additional fuel for the rally was provided by weak producer confidence data, such as the US ISM Index and the German Ifo Index. To conclude, bonds were also supported by dovish remarks from Fed officials such as Vice Chair Clarida, suggesting that the Fed would be willing to discuss rate cuts. The only developed government bond market that did not participate in the rally was Italy. Italian BTPs were down 0.4% following comments from Lega Leader Salvini, which suggested that the Italian government is not willing to meaningfully adjust fiscal policy to comply with EU rules.

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

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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Market expectations for central bank policy rates have come down substantially, following continued weakness in global economic conditions and the rift in the trade talks between the US and China. The market is now basically expecting the central banks to pursue a more accommodative policy. We expect central banks to deliver. The RBA and RBNZ already cut rates and we expect the Fed to follow soon. Although much is priced in, we do expect the dovish central bank stance to feed a continued bullish stance for bonds. Any rise in government bond yields will probably be seen as a buying opportunity.

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
ISINLU0301741277
BloombergROEGZEU LX
Valoren3244084
WKNA0YFG4
Availability
1st quotation date1180051200000
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
Management fee
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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 0.01% 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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