Credits

Disclaimer

1. General
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2. Important risk disclosures
Important risk disclosures Robeco Capital Growth Funds (“the Funds”) are distinguished by their respective specific investment policies or any other specific features. Please read carefully for the risks of the Funds:

Some Funds are subject to investment, market, equities, liquidity, counterparty, securities lending and foreign currency risk and risk associated with investments in small and/or mid-capped companies.
Some Funds are subject to the risks of investing in emerging markets which include political, economic, legal, regulatory, market, settlement, execution, counterparty and currency risks.
Some Funds may invest in China A shares directly through the Qualified Foreign Institutional Investor (“QFII”) scheme and / or RMB Qualified Foreign Institutional Investor (“RQFII”) scheme and / or Stock Connect programmes which may entail additional clearing and settlement, regulatory, operational, counterparty and liquidity risk.
For distributing share classes, some Funds may pay out dividend distributions out of capital. Where distributions are paid out of capital, this amounts to a return or withdrawal of part of your original investment or capital gains attributable to that and may result in an immediate decrease in the net asset value of shares.
Some Funds’ investments maybe concentrated in one region / one country / one sector / around one theme and therefore the value of the Fund may be more volatile and may be subject to concentration risk.
The risk exists that the quantitative techniques used by some Funds may not work and the Funds’ value may be adversely affected.
In addition to investment, market, liquidity, counterparty, securities lending, (reverse) repurchase agreements and foreign currency risk, some Funds are subject to risk associated with fixed income investments like credit risk, interest rate risk, convertible bonds risk, ABS risk and the risk of investments in non-investment grade or unrated securities and the risk of investments made in non-investment grade sovereign securities.
Some Funds can use derivatives extensively. Robeco Global Consumer Trends Equities can use derivatives for hedging and efficient portfolio management. Derivatives exposure may involve higher counterparty, liquidity and valuation risks. In adverse situations, the Funds may suffer significant losses (even a total loss of the Funds’ assets) from its derivative usage.
Robeco European High Yield Bonds is subject to Eurozone risk.
Investors may suffer substantial losses of their investments in the Funds. Investor should not invest in the Funds solely based on the information provided in this document and should read the offering documents (including potential risks involved) for details.

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Alpha drivers

Our credit strategies capture market inefficiencies through the use of two low-correlated performance drivers:

Top-down positioning

An essential element for adding value to a credit portfolio is to determine what level of risk to run at any given moment in the market cycle. We assess the expected credit environment on a quarterly basis and change the portfolio’s credit beta accordingly. As a result, the portfolio is positioned to benefit from or weather against the anticipated stage of the market cycle.

Credit issuer selection

We use fundamental analysis to target mispriced bonds and instruments. Research is concentrated on the issuer’s business position, corporate strategy, ESG profile, corporate structure and financial profile. The focus of all sustainability analysis is on downside risk, on absolute impact and on financially material issues.

Risk management

Accurately measuring credit risk is a significant challenge for credit investors. We have developed an innovative method that provides insight into the nature and extent of risk in credit portfolios. Based on the duration time spread (DTS) of each bond, portfolio managers can implement their views more effectively. DTS was originally co-developed by Robeco researchers in 2003. The results were published in The Journal of Portfolio Management in 2007¹. DTS is now widely accepted and market standard among investors, and has been implemented in leading risk management software, including MSCI RiskMetrics and Bloomberg PORT.
¹“Duration Times Spread: A new measure of spread exposure in credit portfolios”, The Journal of Portfolio Management, 2007, vol. 33. no. 2, pp. 77-100

Team

This strategy is managed by the Credit team, consisting of around 10 portfolio managers and more than 25 credit analysts with a clear split in responsibilities. The portfolio managers are primarily responsible for the portfolio construction. Analysts are focused on creating the deepest possible issuer research and are clustered around sector specializations, covering issuers across the rating spectrum from investment grade to high yield and emerging markets. This allows them to identify and exploit crossover opportunities including fallen angels and rising stars. Analysts have the same remuneration package as portfolio managers.

Sustainability

This strategy promotes, among other characteristics, environmental and/or social characteristics, which can include exclusionary screening, ESG integration, ESG risk monitoring and active ownership. It is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (SFDR).

We also offer a range of SDG credit portfolios with sustainable investment as their objective and a Paris-aligned Climate Global Credit solution; all classified as SFDR Article 9.

Our analysis of issuers goes beyond the traditional financial factors and includes the issuers’ performance on ESG factors. It is 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 past credit events can be attributed to issues such as poorly designed governance frameworks, environmental issues or weak health and safety standards. The aim of ESG integration is to improve the risk-return profile of the investments; it does not have an impact goal. ESG analysis is fully integrated in the bottom-up issuer analysis. We have defined key ESG factors per industry, and for every company we analyze how the firm is exposed to these key ESG factors, and how this impacts the fundamental credit quality.