Evert Giesen is Portfolio Manager Investment Grade in the Credit team. Previously, he was an Analyst, responsible for covering the Automotive sector within the Credit team. Prior to joining Robeco in 2001, Evert worked at AEGON Asset Management for four years as a Fixed Income Portfolio Manager. He has been active in the industry since 1997 and holds a Master's in Econometrics from Tilburg University. Jan Willem Knoll is Portfolio Manager Investment Grade in the Credit team. He joined the Credit team in 2016. Previously, Jan Willem headed the Financials Equity sell-side research team at ABN AMRO. He started his career in the industry in 1999 at APG, where he held several positions including Portfolio Manager of a global insurance portfolio and subsequently a pan-European financials portfolio. Jan Willem holds a Master’s in Business Economics from the University of Groningen and he is a CFA® charterholder.

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.

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.

Sustainability is incorporated in the investment process by the means of a target universe, exclusions, ESG integration, and a minimum allocation to ESG-labeled bonds. 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. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where a credit issuer is flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to exclusion.For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on 1/3 BB US Corp HY + Pan Euro HY ex Financials 2.5% Issuer Cap + 1/3 JPM Corp EMBI Broad Diversified Index + 1/3 BB Global Agg Corp Index.

February started with the announcement of trade tariffs on Mexico, Canada and China by the US. Financial markets reacted negatively and credit spreads widened slightly. Last hour, tariffs were postponed by one month and spreads retraced from earlier losses. In the second half of February, inflation fears returned to markets driven by a higher-than-expected CPI number for January. The CPI release and the tariff discussion led to higher inflation expectations being priced in. Growth expectations were coming down as there were some weaker data prints, including consumer confidence. The United States and Russia started talks on ending the war in Ukraine. The potential end of the war led to a strong performance of European markets. In Germany, the election result will most likely result in a CDU/CSU and SPD government. Global High Yield Index spreads rose 17 bps to 3.24% and spreads on the Bloomberg Global Aggregate Corporates Index rose 5 bps to 0.90%. In emerging markets, the CEMBI spread rose 6 bps to 2.53%. Five-year treasury yields declined 31 bps to 4.02%, as growth concerns dominated inflation concerns.

Based on transaction prices, the fund's return was 1.65%. The total return was positive in February, as both duration and credit made positive contributions. The duration exposure of the fund contributed positively as treasury yields declined in February. Although overall credit markets showed mildly negative returns, the fund had positive contributions from credit exposures. This was mainly driven by exposure to EUR-denominated debt which showed strong performance in February. Top contributors on a ticker level were positions in Adani Renewable Energy. Also European names such as EPH, IHO and Cellnex contributed positively. Some of the utility exposures in the US, such as Sempra and NextEra, contributed negatively.

Market indices show that credit markets are trading pretty close to historical tight levels. From current levels, not a lot of tightening is to be expected. With potential risk from the macro and geopolitical side, there could be potential spikes in spreads. With some indicators pointing to economic weakness, we continue to prefer instruments with shorter spread duration. The portfolio can continue from carry and roll down while at the same time the portfolio has some protection against widening of credit spreads. Treasury yields remain volatile. In recent weeks yields have traded down on growth concerns. As inflation has also increased, the Fed will in our view be very reluctant to materially lower rates in the coming quarters. With the economy showing some signs of cooling, but a recession still unlikely given the potential positive impact from tax cuts, we expect that inflation concerns will start to drive treasury yield direction again at some point. For the coming period, we expect continued volatility in treasury yields, with some upward pressure if inflation concerns revive.