Robeco Global Total Return Bond Fund IH USD

December saw a renewed sell-off in bonds. Yields rose by 25 bps for US Treasuries and roughly 60 bps for German Bunds, creating negative returns of -0.8% for the US and -4.2% in Germany. In Japan, the BoJ widened the band of yield curve control on the 10-year point of the curve from 25 bps to 50 bps, causing 10-year JGBs to end the month 16 bps higher, which resulted in negative returns of -1.2%. The Fed hiked rates by 50 bps, in line with market expectations. The update of the Summary of Economic Projections was hawkish though, with the median dot for the Fed funds rate in 2023 being lifted from 4.6 to 5.1%. The ECB also hiked by 50 bps and sounded hawkish, signaling the need for significant further tightening as well as announcing start of QT in March 2023. The spread between Italian BTPs and Bunds in 10-year maturities widened by 19 bps.

Currency risks are hedged, however active currency positions of the fund are part of the investment strategy and will not be hedged.

All income earned is accumulated and not distributed as dividend. Therefore the total return is reflected in the share price development.

The fund incorporates sustainability in the investment process via exclusions, negative screening, ESG integration, limits on investments in companies and countries based on ESG performance as well as engagement and a minimum allocation to ESG-labeled bonds. For government and government-related bonds, the fund complies with Robeco’s exclusion policy for countries, excludes the 15% worst ranked countries following the World Governance Indicator 'Control of Corruption', and ensures investments have a minimum weighted average score of 6 following Robeco's proprietary Country Sustainability Ranking. The Country Sustainability Ranking scores countries on a scale from 1 (worst) to 10 (best) based on 40 environmental, social, and governance indicators. For corporate bonds, 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. 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. Where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement. Lastly, the fund invests in a minimum of 2.5% in green, social, sustainable and/or sustainability-linked bonds.

Robeco Global Total Return Bond Fund invests in government and corporate bonds, and has the flexibility to invest in emerging debt, with the aim of capturing opportunities in fixed income classes around the globe. The investment process and bond selection is fundamentally driven, based on in-depth research. By adopting a contrarian approach to markets, with a focus on value, while utilizing tools to measure risk aversion, euphoria and value, we believe we can exploit market inefficiencies over the cycle. The fund aims to deliver an attractive total return, also on a risk-adjusted basis. 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. The duration of the fund will be managed actively and can move between 0 and 10 years. Active currency positions are part of the investment strategy. The backbone of the investment process is consistent and in-depth fundamental research on both companies and countries.

The fund aims to deliver an attractive total return, also on a risk-adjusted basis. The fund targets an ex-ante total return volatility within the range of 2 to 6% and can adjust the duration of the portfolio between 0 and 10 years. The leverage exposure of derivatives on a fund level is restricted as described in the prospectus.