RobecoSAM SDG Credit Income D2H USD

The Credits Income Fund reported a positive return of +2.7% in USD. Global investment grade credits returned +1.15%, while emerging market credits returned +3.88% and high yield credits +4.21%. Risk-free returns were positive this month, as rates moved down. Excess returns on credit were positive, as spreads recovered significantly. Covid-19 continues to spread across the globe. When conditions allow, governments are trying to open their economies by easing lockdown measures. With economies expected to reopen and as OPEC 2.0 is making further supply cuts, oil prices have moved up. Central banks and policymakers continue to proactively expand fiscal and monetary measures to put a floor under the markets. The Fed is aiming to quash volatility, lift asset prices and debase the currency, all of which is positive for EM and weaker companies. The ECB communicated it would do “whatever it takes”, as PMI numbers continued to illustrate a bleak outlook. As markets re-price in the future impact of the virus, old issues are brought up to the surface, such as the US-China trade war, Brexit risk, unsustainable debt/GDP figures and deglobalization.

All currency risks are hedged.

The fund make use of derivatives for hedging purposes as well as for investment purposes.

This share class of the fund will not distribute dividend.

In this fund we look for investments with a positive societal impact, whilst generating healthy financial returns. We define impact as an alignment with the UN Sustainable Development Goals (SDGs). We identify and evaluate the impact that specific credits have on the SDGs, and score all the issuers under coverage of the analysts’ team. These scores categorize credits as having either a Positive, Neutral, or Negative impact on the SDGs. The scores are then used in a screening process, to define the investable universe that exclude credits with a Negative impact on the SDGs. In addition to the universe screening, our credit analysts integrate ESG factors in their analysis of the companies fundamental credit quality to strengthen our ability to assess the downside risk of our credit investments. Furthermore the portfolio’s environmental footprint is actively reduced and a part of the portfolio is allocated to green bonds.

RobecoSAM SDG Credit Income has the flexibility to invest in all fixed income segments, including investment grade, high yield and emerging market corporate bonds. This fund aims to maximize current yield and income and seeks to meet the needs of investors who are targeting a consistent level of income. The fund is not constrained by a benchmark. The fund aims to have an overall credit quality of investment grade. Duration is a function of optimizing portfolio yield and income and the expected duration range is between 0-5 years. The fund can have an average maximum active FX exposure of 5% vs the base currency of the share class. The selection of fixed income securities is based on bottom-up fundamental analysis. The fund is managed by an experienced team with a proven track record capable of generating good performance in both rising and falling credit markets. The investment process is well structured and has a disciplined approach and is based both on a top down macro outlook of the credit markets and an in depth and comprehensive bottom up fundamental credit analysis. In addition the fund aims to contribute to realizing the United Nations Sustainable Development Goals (SDGs). The issuers in the investible universe are screened for their contribution to the UN Sustainable Development Goals (SDG). This is done by using RobecoSAM’s proprietary SDG measurement framework. The contribution of a company towards the realization of the SDGs is determined based on three steps; by looking at what a company produces, how a company produces, and correcting for controversies. The fund does not invest in companies that contribute negatively to these goals. The final selection of the securities in the portfolio is based on bottom-up fundamental analysis. Our credit analysts also integrate ESG factors in their analysis of the companies fundamental credit quality to strengthen our ability to better assess the downside risk of our credit investments. Engagement, ESG integration and Robeco's exclusion policy are part of the investment policy.

Risk management is fully embedded in the investment process to ensure that positions always meet predefined guidelines.