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Robeco Financial Institutions Bonds Feeder Fund - zero duration IH USD

ISIN: LU1821796635
  • Diversified exposure to subordinated financial bonds
  • Disciplined and repeatable investment process
  • No active duration, nor FX exposure
Assets class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

This actively managed 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 Financial Institutions 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 mainly in subordinated euro-denominated bonds issued by financial institutions and similar nongovernment fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% 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.

Price development

No performance data available

Price development

Robeco Financial Institutions 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)
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 -1.46%. The underlying portfolio posted a negative return in February, a bit below that of the index. The average credit spread of the index closed the month at a level of 193 basis points, which is 35 basis points more than at the end of January. This means that subordinated financial bonds performed 1.46% worse than underlying government bonds. The beta of the portfolio was above one during the month, which contributed negatively to the performance of the fund. The contribution of issuer selection was close to zero in February. The positions in USD and GBP bonds (which are hedged to EUR) contributed positively to the performance. Bank CoCos underperformed the benchmark on a risk-adjusted basis, implying that the position in CoCos made a negative contribution to the relative performance. Looking at individual positions, the best-performing names were Leaseplan, Intesa Sanpaolo and Westpac. Underperforming positions were BBVA, AIB and Bankia.

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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Markets experienced a hectic month, as sentiment changed drastically after the third week of the month. News from China about the coronavirus was more or less ignored by markets for the bigger part of the month, but this changed as it became clear that contagion had reached Italy and other European countries. In the same week it became clear that the economic impact of the Chinese measure to contain the virus was large. The Chinese manufacturing PMI dropped to the lowest point in decades. Global equity markets tumbled and credit spreads widened in the last week of the month. Part of the negative impact of this spread widening was offset by a decline in underlying government bond yields. The 10-year bund yield dropped by 18 basis points to -0.61% at the end of the month, getting close to the low levels that were last seen in the summer of last year. As said, market sentiment was still strong in the first weeks of the month. Several new bonds were issued, amongst which AT1 CoCos of Intesa and UniCredit. Both bonds sold off in the last week of the month, as they were issued with relatively low reset spreads and because Italy was the country most impacted by the virus.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
Engagement
ESG integration
Exclusion
YesNoN/A 
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

This share class of the fund does not distribute dividend.

ESG Integration policy

The prime goal of integrating ESG factors in our analysis is to strengthen our ability to assess the downside risk of our credit investments. Our analysts include RobecoSAM sustainability data and use external sources to make an ESG assessment as a part of the fundamental analysis.

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 Financial Institutions 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 mainly in subordinated euro-denominated bonds issued by financial institutions and similar non-government fixed income securities. The Master aims to outperform the benchmark by taking positions that deviate from the benchmark. The benchmark of the Master is Barclays Euro-Aggregate: Corp.Fin.Subordinated 2% Issuer Cap.

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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In the past year we have gradually reduced the beta overweight of the portfolio, for instance by reducing the exposure to bank Tier 1 CoCos. This reduction in beta was not driven by worries around the credit quality of the financial sector. The strong spread performance since the start of 2019 was the key trigger to reduce part of the overweight. Spreads have widened significantly in the past two weeks, which makes us more positive about valuations. We do not want to be too early in increasing credit risk again, as it is unclear how large the economic fallout of the spread of the coronavirus will be. On the other hand, in an environment where even US Treasury yields are moving towards the 0% level, we also expect that investors will continue to hunt for yield. It will be more and more difficult to find fixed income assets that offer a decent yield, so subordinated financial debt could attract even more investors. Central banks have already announced their first policy responses and we do not rule out that the ECB will announce more aggressive quantitative easing. This will also support credit markets.

Jan Willem de Moor
Jan Willem de Moor

Jan Willem de Moor

Mr. de Moor is a Senior Portfolio Manager and a member of the Credit team. Prior to joining Robeco in 2005, Mr. de Moor was employed by SBA Artsenpensioenfondsen as Senior Portfolio Manager Equities for six years. Before that, he worked at SNS Asset Management holding positions of Portfolio Manager Equities (three years) and Research Analyst (two years). Jan Willem de Moor started his career in the Investment Industry in 1994. He holds a Master's degree in Economics from Tilburg University.

Team

The Robeco Financial Institutions Bonds fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts (of which four financials 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 dedicated quantitative researchers and 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
ISINLU1821796635
BloombergROF0IHU LX
Valoren41769597
WKN
Availability
1st quotation date1527120000000
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
Service fee

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.

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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.

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