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Robeco Financial Institutions Bonds Feeder Fund - zero duration IH EUR

Reference index: Bloomberg Barclays Euro-Aggregate: Corp. Fin. Subordinated 2% Issuer Cap (EUR)
ISIN: LU1734222885
  • Diversified exposure to subordinated financial bonds
  • Disciplined and repeatable investment process
  • No active duration, nor FX exposure
Assets class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

This Fund is a Feeder Fund invests at least 85% of its assets in shares of Robeco Capital Growth Funds SICAV – Robeco Financial Institutions Bonds (“the Master”). 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 (Barclays Euro-Aggregate: Corp. Fin. Subordinated 2% Issuer Cap) by taking positions that deviate from the benchmark. In this feeder fund the duration (interest-rate sensitivity) of the portfolio is hedged to nearly zero.

Price development

No performance data available

Price development

Robeco Financial Institutions Bonds Feeder Fund - zero duration IH EUR

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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Credit spreads in the market tightened, after they had widened in August. Looking at the relevant index, credit spreads ended the month 15 basis points wider at 210 basis points. Underlying government bond yields increased, offsetting a large part of the positive spread return. The fund underperformed its benchmark. The beta of the portfolio was about 1.2. This implies that the tightening of credit spreads had a positive impact on the relative performance of the fund. Issuer selection contributed negatively though. On a single-name level, there were no specific issuers that contributed very positively or very negatively. Danske bank bonds underperformed after the bank failed to detect money laundering in its Estonian operations. Our holding in this bank was small and the performance impact was therefore small. We added to the position after prices had dropped. We also added a bit to low coupon issues of Direct Line and Belfius, that have been underperforming in the last months. We reduced the holding in Bank of Ireland Tier 1, of which the spread had tightened in the same period.

Statistics

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Market development

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Risky assets performed well during the month as credit spreads tightened and equity markets rose. Developments around the trade war caused some nervousness in the first days of the month alone. Even the sell-off in Italian government debt that occurred in the very last days of the month, did not really disturb credit markets. The contagion effect to Spain or to credit markets in general was limited this time, which is a difference with the spread widening that occurred in May. Another continuing macro theme is emerging markets. A strong recovery was visible in Turkey, while some other countries did not perform very well.One of the specific issues in the banking sector was the shortfall in anti-money laundering (AML) procedures discovered at Danske Bank and ING Bank. We expect this theme to remain important for the sector and that the ECB will play a more prominent role in the supervision of AML procedures. Spread widening in this case was mostly visible at Danske Bank. The market for new bond issues was open again and several issuers tapped the market. Insurance companies Phoenix and Groupama issued new debt, as did banks like Swedbank and Rabobank.

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 does not 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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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 210 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. Catalysts for spread tightening might be a finalization of the budget talks in Italy and a normalization of the rates environment in Europe. It is unlikely that European short-term rates will be raised before the summer, though the end of QE in Europe might push long-term bond yields higher before that. We see opportunities in some of the bonds that have sold off this year, while we keep our cautious stance towards 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
ISINLU1734222885
BloombergROBFFIH LX
Valoren39474947
WKN
Availability
1st quotation date1524700800000
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

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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 0.01% 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

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual 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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