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Robeco High Yield Bonds Feeder Fund - zero duration D2 USD

Index: Bloomberg US Corporate High Yield + Pan Euro HY ex Financials 2.5% Issuer Cap
ISIN: LU1857098849
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Asset class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.

Price development

No performance data available

Price development

Robeco High Yield Bonds Feeder Fund - zero duration D2 USD

Performance

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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 -0.02%. The high yield bond index had a negative total return in August of -2.27%. Wider spreads as well as higher underlying rates contributed to the negative total return. The fund lagged its benchmark in August by a few basis points. For the year, total returns of the market are still very negative. The fund delivered a strong outperformance year-to-date. The underperformance in August was mainly on the back of issuer selection, as beta policy had a small positive. The financial sector outperformed corporates and hence the overweight position in this sector added to performance. Our quality bias made a negative contribution for the month, as CCCs and Bs outperformed BBs on a risk-adjusted basis. We benefited from our regional overweight in Europe versus the US. On an issuer level, being underweight in Bausch Health was the largest contributor (+7 bps) to the relative performance of the fund. An aggressive bond exchange offer from the company pushed bonds lower. Our overweight in B&G Foods was the largest detractor (-5 bps) after its bonds were downgraded to CCC. We benefited from overweights in Olympus Water, Sylvamo and Sigma – all adding around 3 bps.

Statistics

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Market development

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August was a month of two halves for high yield markets. We started off initially on a positive note, with some earnings coming in better than expected and after July's CPI downward surprise. Spreads tightened as much as 60 bps to a level of 437. But around the halfway point, that positive mood began to turn as investors recalibrated the Fed. There was a pronounced sell-off after Fed Chair Powell delivered a hawkish message in his speech at Jackson Hole, mentioning a restrictive policy stance for some time. Spreads ended the month at 501 bps with a total yield of 8.15%, as underlying government bonds also moved wider as a faster pace of rate hikes was expected. The pattern was the same in Europe, where sovereign bonds had their all-time worst performance on the back of record high inflation figures for the Eurozone. The growing concerns about European inflation followed a substantial rise in energy prices over the last month as well. Natural gas futures rose a further +25.7% over the month as a whole to EUR 240 per megawatt-hour. Meanwhile, August's high yield issuance totaling USD 8.1 bln was the lightest for the calendar month since 2014.

Fund allocation

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Name Sector Weight
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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 does not distribute dividend.

ESG Integration policy

The fund incorporates sustainability in the investment process via exclusions, ESG integration and engagement. The fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.

Investment policy

This actively managed fund is a Feeder Fund and invests at least 85% of its assets in class Z2H shares (hedged to USD) of Robeco Capital Growth Funds SICAV - Robeco High Yield Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers.The fund's objective is to provide long term capital growth. Through its investment in the Master, the fund promotes E&S (i.e. Environmental and Social) characteristics within the meaning of Article 8 of the European Sustainable Finance Disclosure Regulation, integrates sustainability risks in the investment process and applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to, normative, activity-based and region-based exclusions, and engagement. The Feeder Fund uses interest rate derivatives to hedge the interest rate risk of the Master to nearly zero. The duration hedge will lead to intended performance differences as a result of interest rate movements between the Feeder Fund and the Master.The majority of bonds selected will be components of the Benchmark, but bonds outside the Benchmark index may be selected too. The Master Fund can deviate substantially from the weightings of the Benchmark. The Master aims to outperform the Benchmark by taking positions that deviate from the Benchmark. The Master 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 Master 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

ESG Integration

Engagement

Sustainability

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The fund incorporates sustainability in the investment process via exclusions, ESG integration and engagement. The fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.

Expectation of fund manager

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Despite the rebound in July, the year-to-date performance for high yield is still very negative. Spreads have not reached the levels that we typically see in the run-up to a recession, but pockets of value have certainly appeared. The ECB and especially the Fed have tightened monetary conditions in order to reduce demand in an effort to fight inflation. With the current levels of inflation and required monetary tightening, it will be very difficult to avoid a hard landing. We have already witnessed an increase in idiosyncratic risk, as some companies face either an inability to pass on higher prices or a slowdown in demand. We expect markets to remain volatile and this will provide opportunities, as markets can easily overshoot. Current spreads offer opportunities to build long positions in higher-quality names at attractive levels. At the same time, we see that lower-quality high yield is still vulnerable, and we continue to be underweight in that market segment.

Sander Bus, Roeland Moraal
Sander Bus, Roeland Moraal

Sander Bus, Roeland Moraal

Sander Bus is Co-Head of the Credit team and Lead Portfolio Manager Global High Yield Bonds. He has been dedicated to High Yield at Robeco since 1998. Previously, Sander worked for two years as a Fixed Income Analyst at Rabobank where he started his career in the industry in 1996. He holds a Master's in Financial Economics from Erasmus University Rotterdam and he is a CFA® charterholder. Roeland Moraal is Lead Portfolio Manager European High Yield in the Credit team. Before assuming this role, he was Portfolio Manager in the Robeco Duration team and worked as an Analyst with the Institute for Research and Investment Services. Roeland started his career in the industry in 1997. He holds a Master's in Applied Mathematics from the University of Twente and a Master’s in Law from Erasmus University Rotterdam.

Team

The Robeco High Yield fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit 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 three dedicated quantitative researchers and four 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
ISINLU1857098849
BloombergROHYD2H LX
Valoren42784520
WKN
Availability
1st quotation date1533168000000
Close financial year31-12
Legal status
Tracking error limit (%)
Morningstar
Reference index

Cost of this fund

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This fund deducts ongoing charges of
These charges comprise
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Transaction costs

The expected transaction costs are

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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 0.05% 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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