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Robeco European High Yield Bonds FH CHF

Index: Bloomberg Barclays Pan-Eur. HY Corp. ex Fin. 2.5% Issuer Cap (hedged into CHF)
ISIN: LU1395470989
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Assets class
Current price ()
Performance YTD ()
Currency CHF
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 FH CHF

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 -1.02%. The fund outperformed the index on a gross performance basis. The total returns were negative for the first time this year on the back of spread widening. The relative outperformance was balanced between beta contribution (13 bps) and strong issuer selection (19 bps). Looking at the other performance drivers, rating allocation was slightly negative, which was counterbalanced by a strong issuer selection within the rating buckets. The sector allocation was mixed, with some relative performance lost in the underweight in communications and overweight in consumer cyclicals. The overweight in financials and underweight in consumer non-cyclicals added a few basis points. The largest contributions were on the back of issuer selection. The substantial spread widening in UK travel agent Thomas Cook added 14 bps. The bonds dropped nearly -50% on the back of suppliers squeezing financial conditions and a grimmer outlook. Not owning Casino added 8 bps. The French supermarket was downgraded to single B and their largest shareholder Rallye asked for creditor protection. Despite Casino's decision not to pay dividends, the bonds took a nosedive on various negative headlines, ending the month almost 10 points lower.

Statistics

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Market development

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The European high yield market suffered its largest setback of 2019 in May. The flare up of the trade war rhetoric between the US and China and deteriorating growth data put commodity prices in a downward trajectory and led to higher risk premiums across the globe. The European High Yield Index delivered a total return of -1%. Which was on the back of roughly 60 bps of spread widening; underlying Bund yields tightened to the lowest levels seen in the past three years. Despite a choppy May performance, the total return number year-to-date for European high yield is around 6%. The rhetoric from both sides of the US-China trade negotiations turned increasingly acrimonious ahead of the G20, whereas Trump also threatened to place escalating tariffs on Mexican imports commencing on 10 June. The index finished the month at a spread level of 410 bps. High quality outperformed low quality in this mini sell-off, with BBs delivering -0.7%, Bs -2.2% and CCCs -2.4%. Fund flows were negative for the first time this year. Issuance numbers were similar to last month, with around 5 billion of additional supply. Year-to-date supply stands at almost 30 billion, nearly 15% down compared to last year.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
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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 markets recovered almost all of the widening in 18Q4. Although mean reversion of spreads is not uncommon to high yield, we feel that the current correction has the classic pattern of a bear market rally. The very strong rebound that started in January is in our view not supported by fundamentals, other than that the Federal Reserve indeed did change its tone and is indicating a much more dovish outlook on monetary conditions now. We remain concerned about corporate leverage and too much risk appetite. Corporate earnings were mixed at best in the first quarter, economic indicators are volatile in both the US and Europe, GDP growth in the largest European countries is disappointingly close to zero, Brexit remains unresolved. Valuations in some parts of the market felt attractive at the beginning of the year, but this reversed rapidly and we are close to October 2018 tights. This holds for both US & European high yield. Overall, our view is cautious as the cycle is late and valuations are tight. We keep our beta below one and we continue to favor high quality high yield.

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
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ISINLU1395470989
Bloomberg
Valoren32233856
WKN
Availability
1st quotation date1461196800000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

Cost of this fund

Ongoing charges

This fund deducts ongoing charges of
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Transaction costs

The expected transaction costs are

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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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