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Robeco Financial Institutions Bonds Feeder Fund - zero duration BH USD

Reference index: Bloomberg Barclays Euro-Aggregate: Corp. Fin. Subordinated 2% Issuer Cap (Hedged into USD)
ISIN: LU1874123158
  • Diversified exposure to subordinated financial bonds
  • Disciplined and repeatable investment process
  • No active duration, nor FX exposure
Assets class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingYes

About this fund

This Fund is a feeder Fund ( the “Feeder Fund”) and as such invests at least 85% of its assets in class Z2H shares of Robeco Capital Growth Funds SICAV – Robeco Financial Institutions Bonds (“the Master”). The Master is a sub-fund of Robeco Capital Growth Funds SICAV, a Luxembourg open-ended investment company with variable capital. The Master invests mainly in subordinated euro-denominated bonds issued by financial institutions and similar nongovernment fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% Issuer Cap. The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund.

Price development

No performance data available

Price development

Robeco Financial Institutions Bonds Feeder Fund - zero duration BH USD

Performance

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Fund Reference 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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Looking at the relevant index, spreads widened from 210 basis points at the end of September to 233 basis points at the end of October. For this reason, the fund posted a negative return in October. The fund underperformed its index, as the top-down overweight positioning contributed negatively. The beta of the portfolio ranged around the 1.25 level. Issuer selection contributed positively to the relative performance.One of the largest positive contributors to the relative performance was the position in Tier 3 bonds issued by UK insurance company Just Group. The bonds had underperformed in the past months, following the UK PRA’s proposed increase in capital requirements for the company’s investments in equity release mortgages. During October, it was announced that new rules would be implemented at the end of 2019 at the earliest. Bonds reacted positively to this news and we decided to exit the position. Other positions that performed well were BBVA Tier 1 and the holdings in low-risk mortgage banks Nykredit and Argenta.

Statistics

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Dividend paying history

Date Amount
Download dividend history

Market development

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Risky assets performed poorly in October. This was visible in the spread widening in our market, but also in the weak performance of equity markets and the US high yield market. A rise in US government bond yields scared investors. The US economy continues to perform very well, leading to fears of higher inflation and higher rates. Notwithstanding this positive economic environment, several industrial companies reported disappointing earnings numbers, leading to sharp reactions in equity markets. Reported earnings of banks and insurance companies did not disappoint. A factor that continues to have a negative impact on sentiment for European financials is the political situation in Italy. The Italian government has so far not given in to the European Commission and is sticking to the proposed 2.4% budget deficit for 2019. Italian government debt underperformed significantly in the first weeks of the month, dragging along bonds of Italian banks and insurance companies. Spanish mortgage banks underperformed after an unfavorable court ruling, raising the tax bill for those banks. If and to what extent this ruling will be applied retroactively, will be decided early November.

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

All currency risks are hedged.

Derivative policy

The Feeder Fund uses derivatives to hedge the duration of the Master. The duration hedge will lead to intended performance differences between the Feeder Fund and the Master. Interest rate movements will have a different effect on the Master and the Feeder Fund.

Dividend policy

The fund aims to pay a quarterly dividend.

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

This Fund is a feeder Fund ( the “Feeder Fund”) and as such invests at least 85% of its assets in class Z2H shares of Robeco Capital Growth Funds SICAV – Robeco Financial Institutions Bonds (“the Master”). The Master is a sub-fund of Robeco Capital Growth Funds SICAV, a Luxembourg open-ended investment company with variable capital. The Master invests mainly in subordinated euro-denominated bonds issued by financial institutions and similar non-government fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% Issuer Cap.

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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After a significant widening in the period from end of January until end of June, spreads are now trading in a fairly stable range. There are several big macro themes that play a role in the market, like the trade war, Italy and Brexit. These themes have been playing out for a while already and seem to have been discounted by the market to a large extent. The market is now trading at a spread of circa 230 basis points, which compares to the low point of 125 basis points at the end of January. Current spread levels are comparable to the spread levels that we saw early April 2017. Fundamentally, banks and insurance companies are still doing well and benefiting for instance from low loan losses in a healthy economic environment. The publication of the European stress test results early November demonstrated that banks have improved their resilience in the past years. An agreement between the EU and Italy on next year’s budget might be a catalyst for spread tightening of financials. At the moment, we see opportunities in some of the bonds that have sold off this year, while we keep our cautious stance towards direct exposures in Italy and emerging markets.

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
Outstanding shares
ISINLU1874123158
BloombergROFIBHU LX
Valoren43545755
WKN
Availability
1st quotation date1537228800000
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

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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