RobecoSAM Climate Global Bonds FH EUR

Government bond markets continued their sell-off in September. Energy crunches, supply and logistics bottlenecks remained at the forefront. In the Eurozone, headline inflation has risen to fresh 10-year highs, and is set to rise somewhat further in Q4. In addition, market attention for the virus faded considerably. Vaccination rates in Europe are high and so far there are no signs of a new autumn infection wave. The German elections outcome provided no real surprises, with the SPD as expected becoming the largest fraction in the Bundestag. The most likely scenario currently seems to be a three-party coalition between SPD/FDP/Greens. Generally, such an outcome is seen as not rocking the boat too much on the fiscal side. In the US, a deadlock is emerging with regard to the debt ceiling, while the Fed is holding on to its policy stance yet indicating that tapering is near. In China, the economy is slowing given the policy-induced tightening of the real estate sector spreading through the economy. This is leading to weakness in Asian credit markets. Global corporate bonds had slightly positive excess returns for the month, with spreads in USD 3 bps tighter and EUR IG -1 bp tighter.

All currency risks are hedged.

The fund does not distribute a dividend.

Climate change considerations are fully integrated in the research process, from an impact and risk perspective. The greenhouse gas emission intensity of issuers is a starting point for determining the impact on climate change, and in our research process we add a forward looking element by assessing the decarbonization potential, strategy and targets. This is to ensure the strategy follows the desired decarbonization trajectory. This may include issuers whose emissions are currently high and that are making an effort to reduce these. Our approach is to invest in sovereign and corporate issuers that allocate capital towards sustainable economic activities. Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. ESG factors play an important role in the investment process, including climate related risks, both in country analysis and credit analysis. For investments in sovereigns, Country Sustainability Ranking and underlying research is used as input for assessment of the structural outlook for a country. For credits, the ESG analysis is part of the fundamental scoring by the sector analyst.

RobecoSAM Climate Global Bonds is an actively managed fund that invests in bonds globally. The selection of these bonds is based on fundamental analysis. The fund's objective is to provide long term capital growth.The fund has sustainable investment as its objective within the meaning of Article 9 of the European Sustainable Finance Disclosure Regulation. The fund contributes to keeping the maximum global temperature rise well-below 2◦C by reducing the carbon footprint intensity of the portfolio. The fund integrates ESG (Environmental, Social and corporate Governance) in the investment process, applies an exclusion list basis controversial behavior, products (including controversial weapons, tobacco, palm oil and fossil fuel) while avoiding investment in thermal coal, weapons, military contracting and companies that severely violate labor conditions, next to engagement. The fund invests in worldwide bonds and other marketable debt securities and instruments (which may include short dated fixed or floating rate securities) issued or guaranteed by OECD member states and by companies based in OECD countries. The fund is managed against a benchmark that is consistent with the sustainable investment objectives pursued by the fund. It aims to align with the Paris Agreement requirements on greenhouse gas emission reduction. For corporate bonds the Benchmark aims to represent the performance of an investment strategy that is aligned with the technical standards for EU Paris Aligned benchmarks in areas such as exclusions and carbon reduction objectives. For investments in government bonds in the Benchmark, the long term aim is to strive for a 7% year-on-year decarbonization as long as this is realistically feasible and technical standards are not applicable. The Benchmark differs from a broad market index in that the latter does not take into account in its methodology any criteria for alignment with the Paris Agreement on greenhouse gas emission reduction and related exclusions.

Risk management is fully embedded in the investment process so as to ensure that the fund's positions remain within set limits at all times.