Robeco Financial Institutions Bonds IH USD
- Diversified exposure to subordinated financial bonds
- Disciplined and repeatable investment process
- No active duration, nor FX exposure
About this fund
Price development
Performance
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundPerformances.date,'llll') ]}}| Fund | Reference index | |
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| 1 year | ||
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| {{'fund.detail.performance.period.sinceInception' | labelize:[ fundDate(fund.fundPerformances.sinceStart.startDate,'MM-YYYY') ]}} |
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 | |
|---|---|---|
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
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}Based on transaction prices, the fund's return was -0.11%. The fund posted a negative total return in October, driven by a widening of credit spreads. 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. Underlying government bond yields declined, but this was not enough to offset the negative impact of wider spreads. 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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Market development
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundInvestmentExplanations.date,'llll') ]}}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
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundAllocations.date,'llll') ]}}| Name | Sector | Weight |
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Fund Classification
| Yes | No | N/A | ||
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| Voting | ||||
| Engagement | ||||
| ESG integration | ||||
| Exclusion |
| Yes | No | N/A | ||
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| Screening | ||||
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| Sustainability Themed Fund |
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
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
Robeco Financial Institutions Bonds mainly invests in subordinated euro-denominated bonds issued by financial institutions. The fund offers a diversified exposure across 50-60 issuers, including the new style hybrid bonds that are being issued on the back of Basel III regulation. Focus of the fund are higher rated bonds (investment grade) with a tilt to Tier 2 bonds. The fund aims to outperform its index Barclays Euro-Aggregate: Corporates Financials Subordinated 2% Issuer Cap. The index 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. As the investment process is well-structured and proven over time, it contributes to repeatable performance delivery. Duration of the portfolio is managed in line with the index and currency exposure is hedged.
Risk policy
Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.
Expectation of fund manager
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}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
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
{{'fund.detail.general.perDate' | labelize:[ fundDate(fund.fundFacts.date,'llll') ]}}| Management company | |
| Fund capital | |
| Outstanding shares | |
| ISIN | LU1117477098 |
| Bloomberg | RFIBIHU LX |
| Valoren | 25594216 |
| WKN | A2AQQV |
| Availability | |
| 1st quotation date | 1412726400000 |
| Close financial year | 31-12 |
| Legal status | |
| Tracking error limit (%) | |
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Cost of this fund
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Transaction costs |
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| The expected transaction costs are |
Performance fee |
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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 0.01% 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.
