Kempen European High Dividend Fund NV - Class N

Profile

Kempen European High Dividend Fund N.V. (KEHDF) offers a diversified portfolio of European listed companies with an expected dividend yield of 2.75% at the time the company purchased for the first time. KEHDF invests in companies that are listed or do business in geographical Europe including Eastern Europe and Russia. The portfolio contains around 55 investments, which are approximately equally weighted. The environmental, social and governance (ESG) criteria are incorporated in the investment process.

KEHDF primarily aims to generate a better long-term total return than the MSCI Europe Total Return Index (net dividends reinvested), comprising capital gains plus net dividends. This index consists of about 500 companies in 15 countries.

KEHDF pays its dividend on a quarterly basis and aims to pay all the received net dividends to the shareholders.

Management team

Jorik van den Bos, Joris Franssen, Joost de Graaf, Dimitri Willems, Luc Plouvier

Performance per 2020-06-30 (rebased)

No chart data available

Performance per 2020-06-30

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  Fund Benchmark
1 month 2.9 % 3.1 %
3 months 13.0 % 12.6 %
This year -20.2 % -12.8 %
2017 10.8 % 10.3 %
2018 -8.0 % -10.6 %
2019 17.8 % 26.0 %
1 year (on annual basis) -14.9 % -5.5 %
3 years (on annual basis) i -3.3 % 0.5 %
5 years (on annual basis) i -1.1 % 1.3 %
Since inception (on annual basis) i 0.7 % 1.1 %
The performance track-record of KEHDF is based on the Orange European Large Cap Fund until ultimo February 2007 including the corresponding benchmark (Dow Jones STOXX 50 Index). As of February 2007 the return data of KEHDF with the current benchmark are shown. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future. The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 258.64 M 2020-06-30
Share class size
EUR 90.65 M 2020-06-30
Number of shares
16,275,078 2020-06-30
Net Asset Value i
EUR 5.56 2020-07-10
Transaction price i
EUR 5.55 2020-07-10
Morningstar rating â„¢
Morningstar Analyst rating
Gold

Fund characteristics per 2020-06-30

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Number of holdings
  Fund Benchmark
49 436
Dividend yield i 5.35 % 3.42 %
Weighted average market capitalization i EUR 38,988 M EUR 69,499 M
P/E ratio i 15.17 19.70
Active share i 82.06 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Market developments per 2020-06-30

June started very positively for both the absolute and relative performances of KEHDF. A continuation of the value rally that had already started in the second half of May was a strong driver of our outperformance. Many analysts and strategists where looking for arguments behind the sudden and sharp value rally, referring to recovering economies and the positive effect on more cyclical sectors. The latter half of the month was more difficult as concerns about the continued disruption by the corona virus, though mostly concentrated in the US and south America dampened the optimism of investors. Despite a more difficult second half of the month, KEHDF had a solid positive performance in absolute terms, but slightly lagged the benchmark.

In June, KEHDF had negative stock selection and positive sector allocation. In particular selection within communication services (Hellenic Telecom and Telenor weak) and energy (Galp and Equinor performed poorly) detracted from the performance. Sector allocation was positive as we are overweight the strongly outperforming financial sector and underweight of the healthcare sector that was the only sector in negative territory.

We implemented the quarterly rebalance of KEHDF. The weight of some of our holdings was changed to reflect more or less conviction in the investment case, but the overall composition of the portfolio was not changed.

For the year, KEHDF is still lagging the benchmark sharply, as the market continues has so far preferred companies that offer short-term safety in terms of visibility of earnings. While we believe our portfolio offers a broad selection of companies with solid balance sheets, strong market positions and attractive valuation, that defensive positioning has failed to show its merits so far this year. We see a clear schism in the market; where a large part of the market has been hit hard by the COVID-19 crisis, a significant part of the market (the part that largely pays no dividends) are priced as if they will be unaffected.

We are confident however that the portfolio will show attractive risk return characteristics over the next 3 to 5 years, with an attractive and growing dividend income stream. We continue to diligently execute our investment process. As is the case with every crisis, it also offers attractive new opportunities. We have already added a number of new attractive companies to the portfolio and are confident that we will find more. In our investment process, we spend a large portion of our time understanding where profitability should be on an over the cycle basis, as this is what determines the cash flows we will receive as a long-term shareholder. A firm may appear attractive based on its price to earnings ratio or other headline multiple, but if margins and/or revenue are high, this only gives you limited information about the future returns of an investment. In a diversified portfolio, we are always going to have individual names that disappoint or surprise to the upside. We believe that a value process of bottom up stock picking will lead to more winners than losers, as our long-term track record indicates. We continue to purchase our investments based on intrinsic value, while ensuring a margin of safety when we select our stocks.

We currently expect a forward dividend yield of around 4.5% for KEHDF. Obviously, this number is indicative and based on current figures with an outlook filled with uncertainties and therefore based on conservative estimates. KEHDF trades at an exceptional discount versus the market. Historically, this has led to a strong relative performance on the medium term. Also, the absolute valuation of the strategy is compelling. In summary, the current environment offers the opportunity to buy a well-diversified portfolio with solid earnings power at an attractive valuation.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2020-06-30 (rebased)

No chart data available

Performance per 2020-06-30

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  Fund Benchmark
1 month 2.9 % 3.1 %
3 months 13.0 % 12.6 %
This year -20.2 % -12.8 %
2017 10.8 % 10.3 %
2018 -8.0 % -10.6 %
2019 17.8 % 26.0 %
1 year (on annual basis) -14.9 % -5.5 %
3 years (on annual basis) i -3.3 % 0.5 %
5 years (on annual basis) i -1.1 % 1.3 %
Since inception (on annual basis) i 0.7 % 1.1 %
The performance track-record of KEHDF is based on the Orange European Large Cap Fund until ultimo February 2007 including the corresponding benchmark (Dow Jones STOXX 50 Index). As of February 2007 the return data of KEHDF with the current benchmark are shown. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future. The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.

Dividends

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Distributing
Yes
Last dividend
EUR 0.06
Ex-date last dividend
2020-05-22
Number of distributions per year
4
Dividend calendar
The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.

Risk analysis (ex post) per 2020-06-30

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  3 years Since inception
Maximum drawdown i -29.38 % -56.33 %
Tracking error i 4.42 % 3.23 %
Information ratio i -0.87 -0.14
Beta i 1.14 0.96
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Top 5 contribution (2020-06-30)

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  Contribution i Performance i
Deutsche Post 0.31 % 16.35 %
AXA 0.29 % 13.61 %
ABB 0.26 % 13.31 %
Allianz 0.25 % 11.63 %
Enel 0.24 % 11.27 %

Bottom 5 contribution (2020-06-30)

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  Contribution i Performance i
ALD -0.19 % -11.07 %
Hellenic Telecommunications Organization -0.10 % -5.03 %
Telenor -0.10 % -4.91 %
Hennes & Mauritz -B- -0.08 % -5.00 %
GlaxoSmithKline -0.08 % -3.15 %

Geographic allocation (2020-06-30)

18.0 %
United Kingdom
15.7 %
France
10.0 %
Netherlands
8.5 %
Switzerland
8.4 %
Germany
5.7 %
Sweden
4.2 %
Spain
4.0 %
Portugal
3.9 %
Norway
3.5 %
Italy
3.7 %
Cash
14.4 %
Overig
Total
100 %

Top 10 holdings (2020-06-30)

2.5 %
Nationale Nederlanden Group
2.4 %
Danone
2.4 %
ALD
2.3 %
Allianz
2.3 %
Enagas
2.3 %
Swatch
2.3 %
AXA
2.3 %
Enel
2.2 %
Engie
2.2 %
GlaxoSmithKline
Total
23.1 %

Sector allocation (2020-06-30)

26.9 %
Financials
13.0 %
Consumer goods
11.5 %
Oil & gas
10.9 %
Utilities
8.2 %
Industrials
7.9 %
Telecommunications
6.7 %
Health Care
5.9 %
Consumer services
5.3 %
Basic Materials
3.7 %
Other
Total
100 %
The cash position is included in ‘Other’.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.63 %
Service fee i
0.15 %
Expected ongoing charges i
0.78 %
Ongoing charges last financial year i
0.78 %
The Ongoing Charges Figure of the last financial year relates to 2018/2019.

The service fee is determined annually on basis of the net asset value as of the last day of the previous financial year:
< or equal to EUR 200 million: 0.20%
Between EUR 200 million and EUR 700 million: 0.15%
>EUR 700 million: 0.10%
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Share class
N
Investor type
Institutional & Private
Distributing
Yes
Benchmark i
MSCI Europe Total Return Index (calculated in Euro)
Investment category
High Dividend Equity
Universum
European equities
Inception date
1998-04-01
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Administrator
BNP Paribas Securities Services S.C.A.
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A.
Morningstar rating â„¢
Morningstar Analyst rating
Gold

Tradability

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Listed
yes, listed on the NAV Trading Facility of Euronext
Subscription/Redemption Frequency
Daily
ISIN i
NL0000293348
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Kempen's vision & mission

Kempen Capital Management is an asset manager that believes in stewardship and investment focusing on the long-term for the benefit of all stakeholders. Value creation is at the heart of the services we provide to our clients. We believe that being an engaged shareholder on environmental, social and governance (ESG) issues and retaining a long-term focus, is critical to helping our clients to preserve and create sustainable wealth that has positive real world impact and economic returns.

Kempen wide approach to responsible investment

We are committed to create sustainable alpha. The four pillars of our ESG-policy are:

  • ESG integration: Ensuring sustainability risks and opportunities are adequately considered in our investment analysis and processes.

  • Exclusion & avoidance: Not investing in companies involved in controversial activities or conduct.

  • Active ownership: Being responsible stewards of our clients’ capital and using our influence through engagement and voting to improve corporate behaviour on specific ESG issues and achieve positive change

  • Positive impact: Investing with an objective to achieve positive real world outcomes and impact, such as contributing to the UN Sustainable Development Goals.

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To put our mission and vision into practice we engage with our investee companies on a wide array of strategic, financial, and ESG topics. As an active owner we use our influence to improve our investee companies’ ESG performance.  This helps us address some of the most pressing and important sustainability issues facing business and the world. Our focus themes for engagement are: human rights, labour rights, climate change and governance.

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Through collaboration with other investors and industry think tanks we contribute to the development of principles and standards of corporate responsibility both at sector levels, as well as investee company level.Â

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Our full voting records are available here.

Our fund approach to responsible investment

Kempen’s ESG policy is fully implemented in our fund’s investment process across the three relevant pillars of:  Exclusion, Integration and Active ownership.

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1. Exclusion

The fund follows the clear and transparent exclusion framework developed by Kempen. According to the framework the fund currently excludes companies involved in the production of controversial weapons and tobacco. Furthermore, the strategy avoids investments in companies that structurally violate ESG criteria, with no willingness to improve. In total 13 companies are excluded from the fund’s European equity universe.

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2. ESG integration

ESG criteria are an integral part of the investment process. The aim is to incorporate material ESG issues in our fundamental analysis. This means that portfolio managers perform an in-depth analysis of ESG data and material ESG risks and reflect them in the assumptions used in the valuation assessment. For example, as demonstrated in the chart on the right side, the ESG impact forms part of our Earnings Power Value (EPV) valuation model.

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3. Active ownership: Engagement

The aim of the engagements our fund participates in is to use our influence as a shareholder to encourage the companies we invest in to improve policies and practices in specific ESG issues. A successful engagement reduces the ESG risk and as a result unlocks value in the interest of our clients. In 2018 we held as a team over 200 company engagements on a range of topics. Â

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In order to lay out our guiding investment principles, we send a “welcome letter” to most of the companies we invest in. In this letter, we explain to the company why we made the decision to invest and what our long-term expectations are, including those in the areas of social and environmental responsibilities and corporate governance.Â

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Our fund also believes in the strength of collaborative engagement. Through cooperation with other investors and fund managers, we can increase the leverage of our engagement activities. In 2018, for example, we participated in the CIO Exchange Collaboration on Energy transition.

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Our engagement focus is on: climate change and energy efficiency, and corporate governance. For example recent activities include:Â

  • Shell: We engaged with senior management to set carbon targets with success as Shell announced that it will link its scope 1, 2 and 3 carbon targets to its remuneration. You can find the engagement factsheet here.

  • Severstal: We are monitoring Severstal’s health & safety efforts and encouraging the company to establish health & safety best practices that set an example to other Russian steel producers. As a result of the engagement, the company is working on a revised policy and process on labour. You can find the engagement factsheet here.

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3. Active ownership: Voting

Exercising our voting rights is also an essential part of the responsible investment philosophy of our fund. We analyse each vote on a case by case basis and often inform the company about our voting intention ahead of the meeting. Where there is a recommendation to vote against management, we ask the company to clarify their viewpoints. In 2018 we voted at a total of 104 shareholder meetings.

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Risks

For more information about the mid and long term risks associated with the investments:

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Although Kempen Capital Management N.V.’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

ESG Report
Screening MSCI ESG research
Screening MSCI ESG research
UN global impact
ESG integration in the EPV valuation model
ESG integration in the EPV valuation model
Bron EN
disclaimer
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.