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Robeco European High Yield Bonds IH EUR

Index: Bloomberg Barclays Pan-Eur. HY Corp. ex Fin. 2.5% Issuer Cap (hedged into EUR)
ISIN: LU0226955762
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Assets class
Current price ()
Performance YTD ()
Currency EUR
Total size of fund ()
Dividend payingNo

About this fund

Robeco European High Yield Bonds invests in bonds with a sub-investment grade rating, issued primarily by European and US issuers denominated in Euro. The selection of these bonds is based on fundamental analysis. The portfolio is broadly diversified, 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.

Price development

No performance data available

Price development

Robeco European High Yield Bonds IH EUR

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)
Initial charges or eventual custody charges which intermediaries might apply are not included.
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)
Initial charges or eventual custody charges which intermediaries might apply are not included.
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 0.35%. The fund underperformed the index on a gross performance basis. Total returns were slightly positive and mainly driven by the rally in underlying Bunds. Our quality bias contributed once again to last month’s results. BBs outperformed Bs and CCCs on a risk-adjusted basis. On a sector level, we see technology and communications as the outperformers for the month. This on the back of Equinix being upgraded to investment grade. SFR and Altice delivered around 4% of total returns, which was on the back of a strong set of Q2 headline numbers. Another notable move in this space was the debt refinancing of Wind Tre. Parent company CK Hutchison (single A) announced its intention to repay Wind Tre’s EUR 10 bln in non-recourse debt. More or less the same happened to Refinitiv. They were bought by the London Stock Exchange Group, which is rated single A, for USD 27 bln. The biggest outperformer was not holding Thomas Cook, which added 5 bps to our relative performance. Bonds dropped more than 10 points and a restructuring of the capital structure seems unavoidable. Our off-benchmark position in UniCredit also contributed positively, as this Italian bank was upgraded to investment grade.

Statistics

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Market development

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The European high yield market traded more or less sideways in July, as a dovish central bank backdrop provided some support for spreads. Total returns were a small positive for the month, helped by the first rate cut by the Fed since 2008. Rates went down, but the market was disappointed the Fed did not deliver 50 bps of cuts. Mario Draghi’s last press conference for the ECB reaffirmed the bank’s dovish stance. Even without a firm change in policy, his statements pushed down German Bunds even further. The trade war with China remains a heated topic, sparking market-wide volatility as a deal seems more uncertain than before. The market has seen a small uplift in supply for the month, which was absorbed by the continuous inflow into our asset class. Year-to-date new issuance volume is still down 17% compared to last year. Equinix was upgraded to investment grade, which caused EUR 2.75 bln to leave the European High Yield Index. Automotive was the biggest laggard for the month, as the sector is suffering from top line contraction and suppliers revised their full year outlook downwards. The European High Yield Index spread widened and is now around 354 bps, with a yield of 3.01%.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
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ESG integration
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Sustainability Themed Fund

Currency policy

All currency risks are hedged.

Derivative policy

Robeco European High Yield Bonds make use of derivatives for hedging purposes as well as for investment purposes. These derivatives are very liquid.

Dividend policy

The fund does not distribute dividend. The income earned by the fund is reflected in its share price. The fund's entire result is thus reflected in its share price development.

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

Robeco European High Yield Bonds invests in bonds with a sub-investment grade rating, issued by European issuers. The portfolio is broadly diversified across approx. 80 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. Duration of the portfolio is managed in line with the index and currency exposure is hedged. The fund aims to outperform its index Barclays Pan European High Yield ex Financials 2.5% Issuer Cap. The index excludes high yield financials based on relatively high systematic risk, and applies an issuer cap to avoid concentration risk. The investment philosophy is based on managing a solid diversified portfolio with a long term view. Top-down beta positioning is based on the outcome of our credit quarterly outlook meeting, in which the team is discussing the fundamental market outlook, valuation of bond markets and market technicals. Bottom-up issuer research is executed by our credit analysts, who execute the fundamental analysis. The portfolio managers are responsible for the portfolio construction. A proprietary developed risk management approach avoids high risk concentration in the portfolio. The Robeco European High Yield fund is managed by our credit team which consists of seven portfolio managers and twelve credit analysts. Within the team, Sander Bus and Roeland Moraal are responsible for high yield. Sander has been involved in the fund since inception in 1998, Roeland joined in 2003. The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team's fundamental research.

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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It is clear to us that deglobalization is under way. This is a secular trend fueled by widespread populism, which will cause trade tariffs to rise for the first time in 40 years. In the medium term, this will put pressure on the advantage of cheap outsourced labor (China), ultimately eroding record-high margins. Another secular trend is the development of a less economically favorable demographic backdrop, changing established trends in saving and investment. Finally, the bursting 12 years ago of the debt super cycle is the main ongoing reason for cautious household sector behavior and the consequent impotence of traditional monetary policy. Our research illustrates that there is typically a short period of time after the first rate cut where credit performs well, a ‘sugar rush’ if you will. Furthermore, we are having to cope with a cyclical slowdown in growth, more frequent mini spread cycles driven by lack of liquidity and central bank interventions due to fading inflation. Overall, our view is cautious as the cycle is late and valuations are tight. However, we know it is wise not to fight the Fed or the ECB. We focus on avoiding defaults, we continue to favor high-quality high yield.

Roeland Moraal, Sander Bus
Roeland Moraal, Sander Bus

Roeland Moraal, Sander Bus

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. 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.

Team

The Robeco European 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
ISINLU0226955762
BloombergRGCEHBI LX
Valoren2242481
WKNA0HGD7
Availability
1st quotation date1128297600000
Close financial year31-12
Legal status
Tracking error limit (%)
Morningstar
Reference index

Cost of this fund

Ongoing charges

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

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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.

Disclaimer

Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.

The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.

In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.

In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.

Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.

If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.

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