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Robeco High Yield Bonds Feeder Fund - zero duration IH USD

ISIN: LU1734219741
  • 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 shares of Robeco Capital Growth Funds SICAV – Robeco High Yield Bonds Bonds (“the Master”). The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers. The Master aims to outperform the benchmark (Bloomberg Barclays US Corp. HY & Pan Eur. HY. ex Fin. 2.5% Issuer Cap (hedged into USD)) by taking positions that deviate from the benchmark. The Feeder Fund uses derivatives to hedge the duration 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 IH USD

Performance

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Fund Reference index
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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 2.62%. More than 100 bps of spread tightening pushed the total return of the fund in April to around 3.3-3.5% (depending on the currency), underperforming the index by 76 bps (gross of fees). The underweight beta was the main detractor for the month (-54 bps). Another driver contributing to the underperformance was being overweight in Euro HY vs underweight in US HY, which detracted 18 bps last month. Our quality bias also underperformed in this very strong market. The rebound in commodity prices had a positive impact on the energy sector. Our underweight in this sector caused a relative underperformance of 20 bps. Sectors that added value in May were the underweight in consumer cyclicals (+5 bps) and issuer selection within transportation (+9 bps); mostly by avoiding Hertz, which defaulted on its USD debt, and our overweight in Avis Budget Group bonds, which rebounded more than 20 points after the company managed to issue first lien notes, providing necessary liquidity relief. In addition, car rental activity is picking up again. We added around 8 bps with our underweight in Occidental Petroleum. The company rebounded sharply in April, but lagged the overall index in May.

Statistics

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Above mentioned ratios are based on gross of fees returns
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Market development

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For the second straight month, high yield spreads tightened dramatically. After a rally of 150 bps in April, May proved to be strong as well, with more than 100 bps of spread tightening. Total returns reached more than 4%, outperforming both investment grade and loans. Market sentiment remained bullish, fueled by anticipated support from the Fed. In the end, the Fed bought more than USD 3 billion in HY ETFs, which led to another strong month of inflows. Year-to-date, cumulative fund flows in US HY are at nearly USD 17 billion. The secondary markets absorbed another heavy US issuance calendar, with nearly USD 40 billion in new supply. European issuance numbers are picking up, with around EUR 4 billion issued. However, this remains below the average we normally witness in May. Fund flows in Europe are still negative, with more than EUR 6 billion of outflows. This could be one of the reasons that supply is not back at normal levels. Bleak economic macro data did not spoil the positive sentiment. Oil prices slowly moved up, which helped the much troubled US energy sector. The Global High Yield Index tightened by more than 100 bps to a level of 625 bps, with an average yield of 6.9%.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
Engagement
ESG integration
Exclusion
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Screening
Integration
Sustainability Themed Fund

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

Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. We deem it essential for a well-informed investment decision to take into account those ESG factors that have the potential to materially impact the financial performance of the issuer. This perfectly matches the basic need to avoid the losers in credit management, as many credit events in the past can be attributed to issues such as poorly designed governance frameworks, environmental issues, or weak health & safety standards. The aim of ESG integration is to improve the risk/return profile of the investments and does not have an impact goal. ESG analysis is fully integrated in the bottom-up security analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is positioned versus these key ESG factors, and how this impacts the fundamental credit quality.

Investment policy

This Fund is a feeder Fund ( the “Feeder Fund”) and as such invests at least 85% of its assets in class Z2H shares of Robeco Capital Growth Funds SICAV – Robeco High Yield Bonds (“the Master”). The Master is a sub-fund of Robeco Capital Growth Funds SICAV, a Luxembourg open-ended investment company with variable capital. The Master invests in corporate bonds with a sub-investment grade rating, issued primarily by US and European issuers. The portfolio is broadly diversified across circa 250 issuers, with a structural bias to the higher rated part in high yield (BB/B). Performance drivers are the top-down beta positioning as well as bottom-up issuer selection. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays US Corporate High Yield & Pan European High Yield ex Financials 2.5% Issuer Cap. 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.

Risk policy

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

Expectation of fund manager

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The longest economic expansion has ended abruptly. The end of the expansion itself is not a surprise, but the nature of the exogenous shock, its speed and the magnitude of the slowdown are. History is being made. But while Covid-19 is the proximate trigger, we firmly believe current events are not just about the virus. They have deep secular and cyclical roots. As long as the end of corona and/or a vaccine is not in sight, markets have to rely on strong technicals. Additional monetary and fiscal support has caused markets to rally and inflows continue to pour into the asset class. But a deep recession, an increasing number of defaults and heightened uncertainty surrounding upcoming corporate earnings will be with us for some time. The V-shaped recovery that is priced in at the moment, seems too good to be true. Our contrarian approach is that one should trim risk when the skies are clear, and buy risk when the storm has begun and markets panic. We increased our beta above one in March and have moved back to below one in April/May, after a strong reversal in spreads. Once we see high yield spreads widening, we may consider adding more risk.

Sander Bus, Roeland Moraal
Sander Bus, Roeland Moraal

Sander Bus, Roeland Moraal

Mr. Bus is Head of the Credit team and manages our high yield portfolios. Prior to joining Robeco in 1998, Mr. Bus worked for Rabobank as a fixed income analyst for two years. Mr. Bus holds a Master's degree in Financial Economics from Erasmus University, Rotterdam. He became a CFA charter holder in 2003 and is registered with the Dutch Securities Institute. Mr. Bus has been active in the industry since 1996. Mr. Roeland Moraal, Vice President, CEFA, Portfolio Manager. Roeland is a Senior Portfolio Manager High Yield within Robeco's Credit team since January 2004. Before assuming this role, he was portfolio manager in our Rates team for two years and worked as an analyst with the Institute for Research and Investment Services for three years. Roeland started his career in the investment industry in 1997 at Robeco. He holds a Master's degree in applied mathematics from the University of Twente and a Master's degree in Law from Erasmus University, Rotterdam. Roeland became a CEFA charter holder in 2000 and he is registered with the Dutch Securities Institute.

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
ISINLU1734219741
BloombergROHYFIH LX
Valoren39473733
WKN
Availability
1st quotation date1526342400000
Close financial year31-12
Legal status
Tracking error limit (%)
Reference index

Cost of this fund

Ongoing charges

This fund deducts ongoing charges of
These charges comprise
Management fee
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Transaction costs

The expected transaction costs are

Performance fee

This fund may also deduct a performance fee of

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.

Regulation S Disclosure

The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any US Person. A US Person is defined as (a) any individual who is a citizen or resident of the United States for federal income tax purposes; (b) a corporation, partnership or other entity created or organized under the laws of or existing in the United States; (c) an estate or trust the income of which is subject to United States federal income tax regardless of whether such income is effectively connected with a United States trade or business.