Robeco European High Yield Bonds FH CHF

Roeland Moraal is Portfolio Manager High Yield in the Credit team. Before assuming this role, he was Portfolio Manager in the Robeco Duration team and worked as an Analyst with the Institute for Research and Investment Services. Roeland started his career in the industry in 1997. He holds a Master's in Applied Mathematics from the University of Twente and a Master’s in Law from Erasmus University Rotterdam. Daniel de Koning is Portfolio Manager High Yield in the Credit team. Prior to joining Robeco in 2020, he was Portfolio Manager High Yield at NN Investment Partners. Daniel started his career in 2011 at APG Asset Management, where he held roles of Credit Analyst and Portfolio Manager High Yield. He holds a Master’s in Business Economics from the University of Amsterdam and he is a CFA® and CAIA® charterholder. Sander Bus is CIO and Portfolio Manager High Yield Bonds in the Credit team. He has been dedicated to High Yield at Robeco since 1998. Previously, Sander worked for two years as a Fixed Income Analyst at Rabobank where he started his career in the industry in 1996. He holds a Master's in Financial Economics from Erasmus University Rotterdam and he is a CFA® charterholder. Christiaan Lever is Portfolio Manager High Yield and Emerging Credits in the Credit team. Before assuming this role in 2016, he was Financial Risk Manager at Robeco, focusing on market risk, counterparty risk and liquidity risk within fixed Income markets. Christiaan has been active in the industry since 2010. He holds a Master's in Quantitative Finance and in Econometrics from Erasmus University Rotterdam. 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.

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 0.05% 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.

The fiscal consequences of investing in this fund depend on the investor's personal situation. For private investors in the Netherlands real interest and dividend income or capital gains received on their investments are not relevant for tax purposes. Each year investors pay income tax on the value of their net assets as at 1 January if and inasmuch as such net assets exceed the investor’s tax-free allowance. Any amount invested in the fund forms part of the investor's net assets. Private investors who are resident outside the Netherlands will not be taxed in the Netherlands on their investments in the fund. However, such investors may be taxed in their country of residence on any income from an investment in this fund based on the applicable national fiscal laws. Other fiscal rules apply to legal entities or professional investors. We advise 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.

The fund incorporates sustainability in the investment process via exclusions, ESG integration, a minimum allocation to ESG-labeled bonds, and engagement. 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. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Furthermore, the fund invests at least 2% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.The following sections display the ESG-metrics for this fund along with short descriptions. For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on Bloomberg Pan-European HY Corporate ex Financials 2.5% Issuer Constraint index.

During November, euro high yield market spreads widened by 30 bps and yields were unchanged, ending the period at 344 bps and 5.79%. As global markets went into a risk-on mode following Trump's win at the US election early in the month, the Eurozone had to face the reality of an increasing divergence in growth with the US. According to a report of the European Commission, growth in the economic area will be around 1.1 per cent for the coming year. The French budget situation led to underperformance of the country's assets, exacerbated by the euro declining the most against the US Dollar in 18 months. Economic numbers for the month signaled a slowing business activity in November, on both manufacturing and services, thus stagnation is expected to continue. Inflation for the Eurozone came in at 2.3%, a slight uptick. The same level of inflation was estimated in the UK, where interest rates were cut by 25 bps to 4.75% in the month. In November, EUR 3.8 bln worth of euro high yield bonds were printed. There was one default in the market, with 2 bln of notional affected.

Based on transaction prices, the fund's return was 0.17%. In November, the Euro High-Yield Bond Index posted a total return of 0.43%. The negative excess credit returns (-44 bps), were largely compensated by the underlying treasuries yield dropping more than 30 points to 2.13%. The portfolio underperformed versus the benchmark by 2 bps over the month. The outcome was driven by positive beta contribution (+8 bps) and negative issuer selection (-10 bps). Risk-adjusted returns were low to negative for euro-denominated corporate bonds. Single B rating had the best performance, whereas BBs, where we hold an overweight, were the laggard. CCCs had the worst performance, contributing to performance. Overweight in the off-benchmark banking sector was the main positive contributor (+6 bps), while selection in the capital goods sector detracted (-13 bps). Underweight in Altice France added 5 bps, as the levered Telco released disappointing earnings. On the other hand, worsening numbers for Selecta detracted 12 bps, as the company is nearing maturities and struggling to find refinancing options.

The Fed cut interest rates by 50 basis points, declaring victory over inflation. This preemptive move aims to prevent economic damage from tight policy. The European economy faces a different set of challenges. German manufacturing struggles with weak Chinese demand and continues to be burdened by higher energy costs compared to its overseas competitors. Predicting financial markets is not about forecasting recessions; it's about predicting the direction of change in the consensus. In 2022, the consensus leaned toward a recession that ultimately never materialized — at least not in the US. However, the mere fear of a recession was enough to cause a significant bear market. The 2023 market rallied as consensus shifted. The prevailing market consensus is that the Fed will succeed in achieving a soft landing, balancing the labor market without triggering a sharp rise in unemployment. While we agree, we advise caution in increasing portfolio risk, as the market can pivot quickly, as we have seen in August. This is the environment in which it is important to firmly hold on to our quality tilt and accept a beta below one.