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Robeco Financial Institutions Bonds D EUR

Index: Bloomberg Euro Aggregate Corporates Financials Subordinated 2% Issuer Cap
ISIN: LU0622663176
  • Diversified exposure to subordinated financial bonds
  • Disciplined and repeatable investment process
  • No active duration, nor FX exposure
Asset class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

Robeco Financial Institutions Bonds is an actively managed fund that mainly invests in subordinated euro-denominated bonds issued by financial institutions. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.The fund offers a diversified exposure to subordinated bonds issued by banks and insurance companies and the focus of the fund is in general towards higher rated issuers (investment grade).

Price development

No performance data available

Price development

Robeco Financial Institutions Bonds D 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 -0.85%. The index return for European subordinated financial debt was -0.87% in October. Credit spreads widened 8 basis points to 142 basis points, which means that the spread return of subordinated financial debt amounted to -0.20%. Underlying government bond yields increased, contributing negatively to the total return of the index. The portfolio return was higher than that of the index. The top-down market positioning was slightly underweight, with a beta of around 0.95. There was no performance impact of this top-down positioning and the outperformance in October was fully driven by issuer selection. Individual names that contributed most to performance, on a risk-adjusted basis, were Banco BPM, AIB Group, BNP Cardiff and Helvetia Patria. The underweight position in real estate (Unibail-Rodamco and Grand City Properties, we have no exposure to these two names) contributed positively too.

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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Credit spreads widened a little bit in October, though the magnitude of the widening and the intra-month spread volatility was small compared to the volatility in government bond markets. Underlying government bond yields are still driven by inflation expectations and by the changed tone of central banks. Third-quarter earnings have been solid for most banks and insurance companies, as they benefit from an economic recovery and a decline in credit losses. One sector that was under pressure was the real estate sector. US short seller Viceroy accused Adler Real Estate AG of fraud and this dragged down prices of Adler bonds. The fund has no exposure to the real estate sector, though some names in this sector are included in the index. New issue activity was limited in October and only three new index-eligible bonds were issued. As we did not see much value in these deals, we did not buy any of them. We did buy new Tier 2 CoCos that were issued by BPCE (these will not be included in the index). As we also bought Tier 2 CoCos of BBVA Bancomer in the secondary market, we now have exposure to this category again for the first time in three years.

Fund allocation

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Name Sector Weight
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Currency policy

All currency risks are hedged.

Derivative policy

Robeco Financial Institutions Bonds fund 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 fund retains any income that is earned and so its entire performance is reflected in its share price.

ESG Integration policy

Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.

Investment policy

Robeco Financial Institutions Bonds is an actively managed fund that mainly invests in subordinated euro-denominated bonds issued by financial institutions. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.The fund aims for a better sustainability profile compared to the Benchmark by promoting certain ESG (i.e. Environmental, Social and corporate Governance) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation and integrating ESG and sustainability risks in the investment process. In addition, the fund applies an exclusion list on the basis of controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) and countries, next to engagement. The fund offers a diversified exposure to subordinated bonds issued by banks and insurance companies and the focus of the fund is in general towards higher rated issuers (investment grade). 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, whilst still controlling relative risk through the applications of limits (on currencies and issuers) to the extent of 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 to ensure that positions always meet predefined guidelines.

Sustainability profile

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Exclusions

Full ESG Integration

Engagement

ESG integration policy

{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}

Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.

Expectation of fund manager

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We still believe that humility is called for when assessing our outlook for the next quarters. Aside from the difficulty of making predictions in the current environment, one also wonders about their relevance. Do fundamentals still matter in a world of financial repression, in which monetary and fiscal policymakers set the stage? It seems that markets have downplayed the role of fundamentals for years; one scenario in which the relationship between fundamentals and markets might return is when central banks loosen their grip. The key questions for markets are therefore: when will that happen and should we be looking at central bank signaling, the stock of liquidity, the flow of liquidity or even the delta of the flow in liquidity? With valuations stretched and positioning crowded, we think that the market might be vulnerable to the delta of the flow. In the past quarters, we reduced the overall market sensitivity of the portfolio to neutral versus the index. We mainly achieved this by reducing the exposure to CoCos. In an environment where spreads are low and compressed, we think it makes sense to aim for a more cautious positioning.

Jan Willem de Moor
Jan Willem de Moor

Jan Willem de Moor

Mr. de Moor is a Senior Portfolio Manager and a member of the Credit team. Prior to joining Robeco in 2005, Mr. de Moor was employed by SBA Artsenpensioenfondsen as Senior Portfolio Manager Equities for six years. Before that, he worked at SNS Asset Management holding positions of Portfolio Manager Equities (three years) and Research Analyst (two years). Jan Willem de Moor started his career in the Investment Industry in 1994. He holds a Master's degree in Economics from Tilburg University.

Team

The Robeco Financial Institutions Bonds fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts (of which four financials 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 dedicated quantitative researchers and 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
Size of share class
Outstanding shares
ISINLU0622663176
BloombergROBFIDH LX
Valoren12950162
WKNA1JUN8
Availability
1st quotation date1305504000000
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
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 0.05% 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.

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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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