Robeco Global Green Bonds FH EUR

Michiel de Bruin is Head of Global Macro and Portfolio Manager. Prior to joining Robeco in 2018, Michiel was Head of Global Rates and Money Markets at BMO Global Asset Management in London. He held various other positions before that, including Head of Euro Government Bonds. Before he joined BMO in 2003, he was, among others, Head of Fixed Income Trading at Deutsche Bank in Amsterdam. Michiel started his career in the industry in 1986. He holds a post graduate diploma investment analyses from the VU University in Amsterdam and is a Certified EFFAS Analyst (CEFA) charterholder. He holds a Bachelor’s in Applied Sciences from University of Applied Sciences in Amsterdam. Stephan van IJzendoorn is Portfolio Manager and member of Robeco’s Global Macro team. Prior to joining Robeco in 2013, Stephan was employed by F&C Investments as a Portfolio Manager Fixed Income and worked in similar functions at Allianz Global Investors and A&O Services prior to that. Stephan started his career in the Investment Industry in 2003. He holds a Bachelor’s in Financial Management, a Master's in Investment Management from VU University Amsterdam and is Certified European Financial Analyst (CEFA) Charterholder. Joost Breeuwsma is Portfolio Manager Investment Grade in the Credit team. Prior to starting his career and joining Robeco in 2017, he obtained a Master’s with Distinction in Financial Mathematics from King’s College London.

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’s sustainable investment objective is to invest in green bonds. Green bonds are bonds that are recognized as such by external sources and which proceeds are used to finance or re-finance in part or in full new and/or existing environmentally-friendly projects. The green bond selection is based on external data or an internally developed five-step Green bond framework. The five-step framework states that the issuer's green bond framework must be aligned with market standards related to green bonds such as such as the ICMA Green Bond Principles. Next, the allocation of the investment proceeds must contribute to at least one of the six objectives of the EU Taxonomy nor do any significant harm to the other five. The six objectives of the EU Taxonomy Regulation are climate change mitigation and adaptation, sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and the protection of healthy ecosystems. The third and fourth steps require that the bond issuer reports on the use of proceeds and that the issuance aligns with the wider sustainability strategy of the issuer. The fifth and last step states that the issuer must respect international norms related to conduct such as international labor rights, human rights and the UN Global Compact. In addition, the investment process also takes into account exclusions following Robeco's exclusion policy and integrates financially material ESG factors in the bottom-up issuer analysis to assess the impact on the issuer's fundamentals.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 MSCI Global Green Bond Index (hedged into EUR).

Government bond market returns were mostly positive over November, with Eurozone bonds showing the strongest returns. Yields declined sharply on German government bonds, with the 2-year maturity yield declining a total of 33 basis points to 1.95%. US government bond yields were also somewhat lower, however the decline was concentrated in longer maturity bonds. The 10-year yield declined 11 basis points to 4.17%. The Japanese bond market posted negative returns as yields continue to drift higher. Over the month, the US presidential elections caused a large divergence between US and Eurozone bonds. US yields initially rose as the market focused on possible higher government spending, followed by flattening as focus shifted toward the inflationary impact of potential trade tariffs. In the Eurozone, the opposite reaction occurred, as US tariffs would likely hit economic growth leading to a deeper cutting cycle for the ECB. US corporate green bonds tightened in November. The US election outcome was warmly received by US risk markets, with the S&P 500 gaining close to 6% for the month. The returns for risk assets outside the US was considerably more mixed.

Based on transaction prices, the fund's return was 1.21%. The portfolios performance benefited from the bond market rally in November. The overweight duration position contributed positively, particularly as yields on short-dated euro maturity bonds declined. In addition, the small underweight in Japan added slightly as JGB yields actually rose over the month. Additionally, the underweight position in French bonds, compared to an overweight in Spanish bonds, further enhanced performance. In terms of credit beta, the fund's position in corporates and financials is above neutral. As a result, the performance contribution from beta was positive. Issuer selection was a negative performance driver this month. Almost all of the negative credit performance came from Adani renewable energy subsidiaries, after the DOJ and SEC filed charges against Mr. Adani himself. We are comfortable with our current position as we do not believe the credit fundamentals have been impacted, given there is no refinancing required in the restricted groups. While the latest headline does increase our concerns on corporate governance, this is partially mitigated by the Total Energies ownership stake in the two restricted group issuers.

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 with this consensus, we believe this to be reflected in valuations. As such, we do not see this as the moment to increase portfolio betas. In investment grade credit, we continue to feel comfortable with a beta slightly above 1. For now, we see no change in the strong technical, and if spreads do widen, we have ample room to increase beta accordingly. In a period of economic and political change, not all companies will thrive and credit selection is the key driver of alpha. The overweight positions in banks and corporate hybrids still offer attractive opportunities, so we maintain those exposures. In global portfolios, we remain overweight in European credit, both in investment grade and high yield segments.