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. 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 Robeco Financial Institutions Bonds fund is 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.

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.

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 5% 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.For more information please visit the sustainability-related disclosures.The index used for all sustainability visuals is based on Bloomberg Euro Aggregate Corporates Financials Subordinated 2% Issuer Cap.

European credit markets moved sideways in February, after a very strong performance in January. European assets in general had a strong start of the year, driven by hopes for a more business-friendly administration in Germany and cheap valuations in general. On the equity markets, European banks outperformed the wider European equity market by 15%, a testimony to the underlying balance sheet strength and solid profitability of the sector. Credit spreads of subordinated financials bonds tightened mildly in February, after the strong tightening observed in January. Underlying government bond yields declined in February, as the market was focused on the negative impact of tariffs on the European economy. Inflows into the credit market remained solid and the demand for subordinated bonds was again large. This was also visible in the new issue market, where it was easy for issuers to build large order books.

Based on transaction prices, the fund's return was 0.80%. The total return for the month amounted to 71 basis points. The positive return was driven by lower bond yields, a mild tightening of credit spreads and the running yield (carry) of the portfolio. The average index spread ended the month at 141 basis points, which is 2 basis points lower than at the end of January. The index excess return of subordinated bonds over underlying government bonds was therefore positive, at 0.16%. Underlying government bond yields moved lower during the month, which had a positive impact on the total return. The performance of the underlying portfolio, measured gross of fees, was roughly in line with that of the index. The beta overweight position contributed positively and the issuer selection contributed negatively. Factors that played a role in February were the underweight in French bonds (negative contribution) and the overweight in AT1s (positive contribution). No individual positions made a material positive contribution, while Aroundtown and Grandcity, both real estate names that we do not own, contributed negatively.

Credit spreads for European financial companies are still relatively attractive. At the same time, the financial sector is fundamentally doing well. Balance sheets look robust after years of deleveraging and cyclically, the sector is benefiting from higher interest rates. Going forward, we expect profitability to plateau at a higher level than observed in the period between the great financial crisis and the Covid-19 crisis, as we do not expect central banks to move back to periods of zero interest rates, while at the same time banks have made strong progress in terms of improving their underlying profitability. A such, the resilience of banks to external shocks has greatly improved. Appetite for bonds with higher yields remains strong, as investors like to lock in attractive yield levels. In recent months, a large number of bank AT1s has been issued and order books for those deals were again large. We are becoming more selective in participating in new bond issues, as spreads have tightened. We continue to target a small overweight beta positioning in the fund, as we see opportunities to buy bonds at attractive levels, in primary or secondary markets.