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RobecoSAM Euro SDG Credits IH GBP

Index: Bloomberg Euro Aggregate: Corporates
ISIN: LU1807417479
  • Invests in companies that contribute to the United Nations Sustainable Development Goals
  • Provides a diversified exposure to the Euro investment grade credit market
  • Disciplined and repeatable investment process and experienced team management
Asset class
Current price ()
Performance YTD ()
Currency GBP
Total size of fund ()
Dividend payingNo

About this fund

RobecoSAM Euro SDG Credits is an actively managed fund and provides a diversified exposure to the Euro investment grade credit market. The selection of these bonds is based on fundamental analysis.The fund's objective is to provide long term capital growth.The portfolio is built on the basis of the eligible investment universe and the relevant SDGs using an internally developed framework about which more information can be obtained via the website www.robeco.com/si. The fund can take some off-benchmark positioning in emerging markets, covered bonds and a limited exposure to high yield bonds.

Price development

No performance data available

Price development

RobecoSAM Euro SDG Credits IH GBP

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 -3.35%. The Euro Aggregate Corporate Bond Index returned -3.49% (hedged to EUR) last month. The credit spread on the Bloomberg Euro Aggregate Corporate Bond Index widened from 162 basis points to 218 basis points. Both German and US 10-year yields rose to 1.34% and 3.01% respectively. This generated a negative excess return versus government bonds.The fund outperformed the benchmark by 0.05%. The top-down positioning was more than offset by our issuer selection. The small beta positioning cost us some performance. We continue to hold a position in swap spreads, where we are long 5-year European swap spreads. The contribution was negative last month, as swap spreads widened. We expect swap spreads to normalize over the next quarter. The biggest movers were (in absolute terms); Cellnex Telecom SA, NIBC bank and Volkswagen AG.

Statistics

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Market development

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Concerns around inflation and growth continued to drive markets last month. As a result, interest rate volatility was very high. German and US Treasury yields first moved sharply higher, and then came back down as recession fears kicked in. At the end of the month, yields were higher, contributing to the negative total return.With inflation pressures persisting, central banks remained hawkish. In the US, the consumer price index report came in above expectations at 8.6%. The Federal Reserve hiked its main interest rate in June by 75 bps on the back of this report. The Fed also remains committed to reducing its balance sheet. In Europe, inflation also intensified, which led the ECB to end its asset purchase program as of 1 July. This paves the way for a 25 bps interest rate increase in July. Russia continues to restrict gas deliveries to Europe, making gas one of the commodities with rising prices. As central banks clearly prioritize inflation, investors are increasingly worried about recession risk.

Fund allocation

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Name Sector Weight
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Currency policy

All currency risks are hedged.

Derivative policy

RobecoSAM Euro SDG Credits 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 fund retains any income that is earned and so its entire performance is reflected in its share price.

ESG Integration policy

The fund’s sustainable investment objective is to advance the United Nations Sustainable Development Goals (SDGs). SDG and sustainability considerations are incorporated in the investment process by the means of a target universe, exclusions and ESG integration. The fund solely invests in credits issued by companies with a positive or neutral impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). In addition, 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 of financially material ESG risk on the issuer's fundamental credit quality. Lastly, where a credit issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion.

Investment policy

RobecoSAM Euro SDG Credits is an actively managed fund and provides a diversified exposure to the Euro investment grade credit market. The selection of these bonds is based on fundamental analysis. The fund has sustainable investment as its objective within the meaning of Article 9 of the European Sustainable Finance Disclosure Regulation. The fund advances the UN Sustainable Development Goals (SDGs) by investing in companies whose business models and operational practices are aligned with targets defined by the 17 UN SDGs. The fund integrates ESG (Environmental, Social and Governance) factors in the investment process, applies Robeco’s Good Governance policy. The fund applies sustainability indicators, including but not limited to normative, activity-based and region-based exclusions. The fund's objective is to provide long term capital growth. The portfolio is built on the basis of the eligible investment universe and the relevant SDGs using an internally developed framework about which more information can be obtained via the website www.robeco.com/si. The fund can take some off-benchmark positioning in emerging markets, covered bonds and a limited exposure to high yield bonds. The majority of bonds selected will be components of the Benchmark, but bonds outside the Benchmark may be selected too. The fund can deviate substantially from the weightings of the Benchmark. The fund aims to outperform the Benchmark over the long run, whilst still controlling relative risk through the applications of limits (on currencies and issuers) to the extent of deviation from the Benchmark. This will consequently limit the deviation of the performance relative to the Benchmark. The Benchmark is a broad market weighted index that is not consistent with the sustainable objective of the fund.

Risk policy

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

Sustainability profile

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ESG Integration

Target Universe

SDG Contribution

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The SDG score shows to what extent the portfolio and the benchmark contribute to the 17 UN Sustainable Developments Goals (SDGs). Scores are assigned to each underlying company using the Robeco SDG Framework, which utilizes a three-step approach to calculate a company’s contribution to the relevant SDGs. The starting point is an assessment of the products offered by a company, followed by the way in which these products are produced, and finally whether the company is exposed to any controversies. The outcome is expressed in a final score which shows the extent to which a company impacts the SDGs on a scale from highly negative (dark red) to highly positive (dark blue). The bar shows the aggregate percentage exposure of the portfolio and the benchmark (shaded) to the different SDG scores. This is then also split out per SDG. As a company can have an impact on several SDGs (or none), the values shown in the report do not sum to 100%. More information on Robeco’s SDG Framework can be found at: https://www.robeco.com/docm/docu-robeco-explanation-sdg-framework.pdf

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Sustainability

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The fund’s sustainable investment objective is to advance the United Nations Sustainable Development Goals (SDGs). SDG and sustainability considerations are incorporated in the investment process by the means of a target universe, exclusions and ESG integration. The fund solely invests in credits issued by companies with a positive or neutral impact on the SDGs. The impact of issuers on the SDGs is determined by applying Robeco's internally developed three-step SDG Framework. The outcome is a quantified contribution expressed as an SDG score, considering both the contribution to the SDGs (positive, neutral or negative) and the extent of this contribution (high, medium or low). In addition, 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 of financially material ESG risk on the issuer's fundamental credit quality. Lastly, where a credit issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion.

Expectation of fund manager

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By all standards, we have seen a very significant repricing of assets. European government bonds posted their worst quarter in decades and on top of that, credit spreads widened. Correlations in rates and risk markets have clearly been positive in this regime of financial tightening, taking away the benefits of diversification. If history since 1955 is any guide, we have to conclude as Larry Summers and Alex Domash first pointed out, that from current levels of inflation and labor market overheating, Fed tightening has always resulted in a recession. Spreads on all segments of the credit market are now undoubtedly above median spreads. Euro investment grade and euro high yield have even reached the top quartile. Could spreads go wider in a full-blown recession scenario? Yes, they can. Should we run full underweight positions until we see those highs? No, we do not believe that would be prudent to do. Even though we acknowledge that recession risks are elevated, there is never 100% certainty that this scenario will play out. Given that markets are rapidly repricing, it is sensible to start buying some credit risk now, and we are aiming for a portfolio beta that is just above one.

Peter Kwaak, Jan Willem de Moor
Peter Kwaak, Jan Willem de Moor

Peter Kwaak, Jan Willem de Moor

Peter Kwaak is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2005, he was Portfolio Manager Credits at Aegon Asset Management for three years and at NIB Capital for two years. Peter has been active in the industry since 1998. He holds a Master’s in Economics from Erasmus University Rotterdam and he is a CFA® charterholder. Jan Willem de Moor is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2005, he worked at the Dutch Medical professionals’ pension fund as an Equity Portfolio Manager and at SNS Asset Management as an Equity Portfolio Manager. Jan Willem has been active in the industry since 1994. He holds a Master's in Economics from Tilburg University.

Team

The RobecoSAM Euro SDG Credits fundis 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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ISINLU1807417479
BloombergROBSIHG LX
Valoren41363330
WKN
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1st quotation date1524700800000
Close financial year31-12
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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.

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