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Robeco High Yield Bonds Feeder Fund - zero duration IH USD

Reference index: Bloomberg Barclays US Corp. HY & Pan Eur. HY. ex Fin. 2.5% Issuer Cap (hedged into USD)
ISIN: LU1734219741
  • Managed with a conservative approach
  • Disciplined and repeatable investment process
  • Experienced team management
Assets class
Current price ()
Performance YTD ()
Currency USD
Total size of fund ()
Dividend payingNo

About this fund

This 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)
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 2.26%. The fund outperformed the index on a gross performance basis. Total returns were strong and printing above the 2%, with relative outperformance adding around 50 bps. Our quality bias was the main driver of this month’s results, BBs outperformed Bs and CCCs on a risk adjusted basis in both regions. Our overweight in euro-denominated high yield versus USD also contributed positively, but to a lesser extent. On a sector level, we saw all sectors printing positive returns. Basic industry and capital goods were the strongest-performing sectors, adjusted for risk. Our underweight in energy added to our relative performance as this low-quality (ratings) sector lagged in the strong market. On an issuer level, we saw a massive increase in dispersion. We benefited from our overweight in Tesco that got upgraded to investment grade. Our overweight via the Tesco property bonds added 5 bps. Our underweight in Frontier also added 5 bps. The company was downgraded by Moody’s to Caa1, reflecting the high debt load and weak fundamentals. Our overweights in LBrands and Tereos were the main detractors in June, both detracting around 4 bps.

Statistics

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

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The global high yield market recovered from its setback in May. High yield bond prices increased during June alongside positive equity performance as sentiment benefited from a dovish Fed. The front end of the US Treasury curve indicates more easing by the Fed to come this year. The ECB had a similar dovish rhetoric. Market expectations are that the ECB is most likely to cut its key rate by 10 basis points, together with a resumption of QE. Furthermore, the G20 summit delivered better news than expected, with a truce in the trade tariffs war between the US and China. The Global High Yield Index delivered a total return of around 2.3%. This was on the back of roughly 70 bps of spread tightening, as underlying Treasury yields also tightened further to recent lows. Oil prices are USD 8 off the intra-month low amid dollar weakness, geopolitical tensions and expectations of an extension of the OPEC+ production agreement. The index finished the month at a spread level of 367 bps. High quality outperformed low quality in this recovery, with BBs delivering 2.9%, Bs 2.2% and CCCs 0.9%.

Fund allocation

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Name Sector Weight
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Fund Classification

YesNoN/A 
Voting
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ESG integration
Exclusion
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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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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, 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 of the debt super cycle 12 years ago 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.

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.

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.

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