Kempen European High Dividend Fund N.V. - 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.

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 2019-07-31 (rebased)

No chart data available

Performance per 2019-07-31

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Fund
  Benchmark
1 month -0.5 % 0.3 %
3 months -4.0 % -0.4 %
This year 10.0 % 16.6 %
2016 3.4 % 2.6 %
2017 10.8 % 10.3 %
2018 -8.0 % -10.6 %
1 year (on annual basis) -0.9 % 1.6 %
3 years (on annual basis) i 6.3 % 7.1 %
5 years (on annual basis) i 3.9 % 5.5 %
Since inception (on annual basis) i 1.6 % 1.5 %
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 567.18 M 2019-07-31
Share class size
EUR 98.59 M 2019-07-31
Number of shares
14,376,250 2019-07-31
Net Asset Value i
EUR 6.33 2019-08-16
Transaction price i
EUR 6.32 2019-08-16
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Fund characteristics per 2019-07-31

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  Fund Benchmark
Number of holdings 52 442
Dividend yield i 5.16 % 3.57 %
Weighted average market capitalization i EUR 41,174 M EUR 72,025 M
P/E ratio i 11.33 14.36
Active share i 82.74 %
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

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

Market developments per 2019-07-31

During July, equity markets in Europe managed to realise a small positive performance after a volatile month. The MSCI Europe Index lost almost 1.5% on the last day of July. So far this year, European equities have gained more than what one would normally expect in an average equity year. KEHDF lagged the market this month but performed in line with the dividend universe (all stocks with a dividend yield above 2.5%). Year-to-date, the strategy lags the benchmark. The main reason for the difference is the significant underperformance of value stocks. That said, KEHDF is still close to double digit figures in absolute terms year-to-date.

The second quarter reporting season has started and has been a mixed picture so far. Several companies are more careful in their outlook as they expect the economy to show lower growth as a result of the continuing trade war.

Portfolio developments per 2019-07-31

KEHDF had both slightly negative stock selection and sector allocation. Selection was positive within the sector energy: Wood Group and Galp were strong. Oil services company Wood Group was upgraded by some brokers after its June trading statement that showed further progress with its debt reduction target. Galp published better than expected second quarter results and upgraded its full year outlook. Selection within the information technology sector was also positive as Nokia performed well. The telecom equipment maker reported better than expected results and was more positive about its end markets due to increased 5G investments by its clients. Selection within financials detracted from the performance. AIB Group performed poorly after disappointing results that showed higher costs and higher than expected capital requirements. Lloyds disappointed and lowered the 2019 guidance as a result of ongoing net interest income pressure and a higher than expected PPI (payment protection insurance) charge. Sector allocation to sectors was negative as our underweight in consumer staples (strongest sector in July) detracted from the performance.

The dispersion in valuation between and within sectors is still at extreme levels. Historically, this has been good for the outlook and relative performance for the strategy, but timing is impossible. A company may appear attractive based on its price to earnings ratio or other headline multiple, but if margins and/or revenues are high, this only provides limited information about the future returns of an investment. In our investment process we spent 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.

Our focus is on finding companies with sustainable dividends that can be bought at a discount to our estimate of intrinsic value. We base our estimate on the Earnings Power Value (EPV) framework of the Columbia Business School. EPV allows us to separate the three valuation components: asset value, earnings power and growth value. This framework improves our ability to analyze what we are paying for and gives insight into whether a stock is priced with a margin of safety. In addition, ESG (Environmental, Social and Governance) is fully incorporated in our investment process.

KEHDF now has a forward yield of around 5.5%.
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

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

Performance per 2019-07-31 (rebased)

No chart data available

Performance per 2019-07-31

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  Fund Benchmark
1 month -0.5 % 0.3 %
3 months -4.0 % -0.4 %
This year 10.0 % 16.6 %
2016 3.4 % 2.6 %
2017 10.8 % 10.3 %
2018 -8.0 % -10.6 %
1 year (on annual basis) -0.9 % 1.6 %
3 years (on annual basis) i 6.3 % 7.1 %
5 years (on annual basis) i 3.9 % 5.5 %
Since inception (on annual basis) i 1.6 % 1.5 %
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 0.09
Ex-date last dividend
2019-05-20
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 2019-07-31

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  3 years Since inception
Maximum drawdown i -9.90 % -56.33 %
Tracking error i 2.84 % 2.98 %
Information ratio i -0.27 0.02
Beta i 0.95 0.93
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

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

Top 5 contribution (2019-07-31)

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  Contribution i Performance i
Wood Group 0.31 % 15.39 %
Nokia 0.29 % 12.87 %
Vodafone Group 0.23 % 14.20 %
Arcadis 0.15 % 10.49 %
GlaxoSmithKline 0.14 % 6.27 %

Bottom 5 contribution (2019-07-31)

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  Contribution i Performance i
AIB Group -0.27 % -13.79 %
Renault -0.17 % -8.59 %
SKF AB-B Shares -0.16 % -7.94 %
Lloyds TSB -0.14 % -7.27 %
Equinor -0.12 % -6.33 %

Geographic allocation (2019-07-31)

24.2 %
United Kingdom
13.6 %
France
12.0 %
Netherlands
7.9 %
Germany
6.7 %
Switzerland
5.8 %
Sweden
4.7 %
Russia
4.4 %
Portugal
3.8 %
Norway
3.3 %
Italy
3.5 %
Cash
10.2 %
Overig
Total
100 %

Top 10 holdings (2019-07-31)

2.5 %
Nokia
2.4 %
GlaxoSmithKline
2.4 %
Danone
2.4 %
Galp Energia
2.4 %
Swatch
2.4 %
John Wood
2.2 %
Unilever
2.2 %
ING Groep
2.2 %
Lukoil (US)
2.2 %
Roche Holding
Total
23.4 %

Sector allocation (2019-07-31)

25.8 %
Financials
12.9 %
Consumer goods
12.8 %
Oil & gas
10.7 %
Consumer services
8.3 %
Telecommunications
8.1 %
Basic Materials
7.4 %
Utilities
4.6 %
Health Care
3.5 %
Industrials
3.5 %
Other
2.6 %
Technology
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

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

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
0.73 %
The Ongoing Charges Figure of the last financial year relates to 2017/2018.

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%
The service fee has been increased by 0.05% as of 1 October 2018. The expected ongoing charge factor of Fiscal Year 2018/2019 is therefore also increased by 0.05%.

Other costs

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Upward swing factor i
0.30 %
Downward swing factor i
0.15 %
As of 14 January 2019 the swing factor has been adjusted from 0.40%/0.15% to 0.30%/0.15%.
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). 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
Silver

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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). 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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). 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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*

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 Research
Screening MSCI Research
UN Global Compact
ESG integration in the EPV valuation model
ESG integration in the EPV valuation model
Source
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 Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at The Netherlands Authority for the Financial Markets.

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