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Robeco Financial Institutions Bonds Feeder Fund - zero duration D3H USD

Reference index: Bloomberg Barclays Euro-Aggregate: Corp. Fin. Subordinated 2% Issuer Cap (hedged into USD)
ISIN: LU1874123406
  • 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 D3H 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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The average credit spread of the index widened from 233 basis points to 270 basis points during the month, contributing negatively to the return of the portfolio. The index spread is now back at the level that was last seen in July 2016. Underlying government bond yields declined during the month, benefiting the portfolio’s return. The beta of the portfolio was higher than one, implying that the top-down positioning contributed negatively to the performance of the portfolio. The impact of issuer selection to the relative performance was close to neutral. Bonds that performed fairly well in the portfolio were Tier 2 bonds issued by banks with low-risk lending books. Examples here are Argenta (Belgian and Dutch mortgages), Nykredit (Danish mortgages) and DBS Bank from Singapore. UK banks performed poorly, the portfolio was negatively impacted by the overweight in Nationwide. Sabadell Tier 2 bonds widened significantly after the bank issued a new Tier 2 bond at a very attractive spread. We have seen more examples lately of very cheap primary deals resetting the spreads of existing bonds.

Statistics

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Dividend paying history

Date Amount
Download dividend history

Market development

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Risky assets had a rough ride again in November and subordinated bonds of banks and insurance companies were no exception. While spreads tightened in the first week of the month, this was followed by significant spread widening in the weeks thereafter. Investors are becoming more concerned about the economic outlook, as economic data in Europe is surprising negatively and momentum in the US seems to be slowing down too. Worries around Brexit increased, as the political situation within the Conservative government turned out to be very volatile. UK banks suffered significantly in this period, with Barclays and RBS being the worst performers. Another volatile part of the market was Italy. The yield differential between Italian government bonds and German Bunds peaked at circa 3.25% on 20 November. Since then, Italian BTPs have outperformed German Bunds. It seems that the Italian government is willing to make adjustments to its 2019 budget after all, which is taken positively by the market. Italy issued a new bond targeted at retail investors, but appetite for this bond disappointed. This might be one of the reasons for the change in tone of the populist government.

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

This share class of the fund will distribute 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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In the past month, spreads have widened significantly, reaching higher levels than the trading range we saw since the start of the summer. In fact, spreads are now trading in the range that we last saw in the first half of 2016. At that time, markets were worried about a global slowdown in economic growth. For the financial sector specifically, markets worried about the credit risk of Deutsche Bank and about the fact that coupon payments on AT1 CoCos could be at risk. To some extent, we are seeing similar worries right now. Economic growth is slowing down and the market is currently reassessing the risk of callable bonds being extended after the first call date. We would argue that a large part of the increased risks is priced in by the market. Bonds with low reset spreads have widened significantly and are trading at cheap levels now. Brexit, Italy and conduct charges are risks facing the financial sector, but the companies involved have seen a significant repricing already. We are not concerned about the fundamental credit quality of the sector. The significant deleveraging that took place over the past years means that the sector is well equipped to face lower economic growth.

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
ISINLU1874123406
BloombergROFD3HE LX
Valoren43545773
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
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.

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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