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Robeco European High Yield Bonds DH EUR

Index: Bloomberg Barclays Pan-Eur. HY Corp. ex Fin. 2.5% Issuer Cap (hedged into EUR)
ISIN: LU0226953981
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Assets class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

Robeco European High Yield Bonds invests in bonds with a sub-investment grade rating, issued primarily by European and US issuers denominated in Euro. The selection of these bonds is based on fundamental analysis. The portfolio is broadly diversified, with a structural bias to the higher rated part in high yield (BB/B). Performance drivers are the top-down beta positioning as well as bottom-up issuer selection.

Price development

No performance data available

Price development

Robeco European High Yield Bonds DH 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 -0.97%. The European High Yield Index printed the weakest month of the year. The fund outperformed its index by a few basis points on a gross performance basis. Financials underperformed versus Corporates and so this did not drive this month’s relative outperformance. Our quality biased position contributed flattish, as there was not much dispersion between rating classes on a risk-adjusted basis. All sectors were in negative territory, with cyclical sectors giving up just a bit more. Basic industries was the clear bleeder this month, while non-cyclicals and technology held up pretty well. The latter is the best performing sector year-to-date. On an issuer level, we benefited from not owning Italian credit risk in names like CMC Ravena, Telecom Italia and Moby. They all widened on the sovereign tumult. We also saw weakness in some UK names like Jaguar/Landrover, New Look and Thomas Cook. We do not own any of these. Our overweight in Tesco via the property bonds contributed positively as the stock got upgraded by one of the rating agencies. We lost some ground with our overweight in automotive. Names like Adient, Axalta, Antolin and Shaeffler underperformed.

Statistics

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Market development

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European high yield bond spreads came under some pressure in October. Total returns were negative as excess returns were very weak and underlying Bund yields contributed positively this month. Moderation in global growth expectations was visible in the equity markets. The S&P500 saw its sharpest decline since September 2011. This was fueled by the underwhelming start of third quarter earnings season, especially in technology. The IMF lowered its growth forecast for the first time in more than two years due to rising trade tensions and emerging market turmoil. Sentiment in Europe was also impaired by the announcement of a larger-than-anticipated Italian budget-deficit proposal, which was rejected by the European Commission. The budget announcement was followed by a sovereign rating downgrade of Italy by Moody’s. All corporate sectors were in negative territory for the month, with the exception of media. Year-to-date technology and healthcare are the best performing sectors. Although spreads widened, the high yield asset class held up ‘relatively’ well compared to others. European high yield bond spreads are now at 402 bps with an average yield of 4.04%.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
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ESG integration
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Sustainability Themed Fund

Currency policy

All currency risks are hedged.

Derivative policy

Robeco European High Yield Bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

Dividend policy

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.

ESG Integration policy

The prime goal of integrating ESG factors in our analysis is to strengthen our ability to assess the downside risk of our credit investments. Our analysts include RobecoSAM sustainability data and use external sources to make an ESG assessment as a part of the fundamental analysis.

Investment policy

Robeco European High Yield Bonds invests in bonds with a sub-investment grade rating, issued by European issuers. The portfolio is broadly diversified across approx. 80 issuers, with a structural bias to the higher rated part in high yield (BB/B). Performance drivers are the top-down beta positioning as well as bottom-up issuer selection. Duration of the portfolio is managed in line with the index and currency exposure is hedged. The fund aims to outperform its index Barclays Pan European High Yield ex Financials 2.5% Issuer Cap. The index excludes high yield financials based on relatively high systematic risk, and applies an issuer cap to avoid concentration risk. The investment philosophy is based on managing a solid diversified portfolio with a long term view. Top-down beta positioning is based on the outcome of our credit quarterly outlook meeting, in which the team is discussing the fundamental market outlook, valuation of bond markets and market technicals. Bottom-up issuer research is executed by our credit analysts, who execute the fundamental analysis. The portfolio managers are responsible for the portfolio construction. A proprietary developed risk management approach avoids high risk concentration in the portfolio. The Robeco European High Yield fund is managed by our credit team which consists of seven portfolio managers and twelve credit analysts. Within the team, Sander Bus and Roeland Moraal are responsible for high yield. Sander has been involved in the fund since inception in 1998, Roeland joined in 2003. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team's fundamental research.

Risk policy

Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.

Expectation of fund manager

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The US economy is growing above its potential. Job openings are now exceeding the number of unemployed workers. In this environment it is no surprise that the Fed is continuing to hike. Tighter dollar liquidity is putting pressure on non-US issuers that rely on dollar funding. At the same time, the ECB is still reluctant to tighten monetary policy more aggressively. Divergence between global bond markets has increased in the last three months, with US spreads tightening further, while Europe and especially emerging markets underperformed. October showed us that the negative correlation between the US and international credit markets cannot continue indefinitely, as US spreads widened alongside other markets . The fact that the Fed is on a hiking path and the ECB’s quantitative easing is drawing to an end, are not helping fixed income as an asset class. It makes you wonder who will be the marginal buyer of credit and fixed income in general in such an environment. US insurance companies and pension funds could be potential candidates as they may have an incentive to increase fixed income allocations now that coverage ratios have improved. We keep our beta below one.

Roeland Moraal, Sander Bus
Roeland Moraal, Sander Bus

Roeland Moraal, Sander Bus

Mr. Roeland Moraal, Vice President, CEFA, Portfolio Manager. Roeland is a Senior Portfolio Manager High Yield within Robeco's Credit team since January 2004. Before assuming this role, he was portfolio manager in our Rates team for two years and worked as an analyst with the Institute for Research and Investment Services for three years. Roeland started his career in the investment industry in 1997 at Robeco. He holds a Master's degree in applied mathematics from the University of Twente and a Master's degree in Law from Erasmus University, Rotterdam. Roeland became a CEFA charter holder in 2000 and he is registered with the Dutch Securities Institute. Mr. Bus is Head of the Credit team and manages our high yield portfolios. Prior to joining Robeco in 1998, Mr. Bus worked for Rabobank as a fixed income analyst for two years. Mr. Bus holds a Master's degree in Financial Economics from Erasmus University, Rotterdam. He became a CFA charter holder in 2003 and is registered with the Dutch Securities Institute. Mr. Bus has been active in the industry since 1996.

Team

The Robeco European High Yield 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
Outstanding shares
ISINLU0226953981
BloombergRGCEHBD LX
Valoren2242471
WKNA0HGD6
Availability
1st quotation date1128297600000
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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