Kempen Lux Euro Credit Fund - Class AN

Profile

Kempen International Funds SICAV - Kempen (Lux) Euro Credit Fund (the Fund) invests primarily in credits that have an investment grade rating (of minimal BBB-) and are denominated in Euros. The Fund may invest a small part in credits that are not included in the benchmark. The benchmark, the Markit iBoxx Euro Corporates Index, only includes bonds with an investment grade rating.

The Fund aims to earn a higher total long term return than the benchmark by implementing an active investment policy. In order to achieve this, a diversified portfolio is constructed and investment risks are continuously monitored. Investments are selected on the basis of extensive analysis of the terms and conditions of the bond issues.

Management team

Alain van der Heijden, Harold van Acht

Performance per 2021-02-28 (rebased)

No chart data available

Performance per 2021-02-28

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  Fund Benchmark
1 month -0.8 % -0.8 %
3 months -0.8 % -0.8 %
This year -1.0 % -0.9 %
2018 -0.8 % -1.3 %
2019 6.7 % 6.3 %
2020 3.8 % 2.7 %
1 year (on annual basis) 1.8 % 1.0 %
3 years (on annual basis) i 3.0 % 2.3 %
5 years (on annual basis) i 3.0 % 2.5 %
Since inception (on annual basis) i 5.1 % 4.2 %
On 23 July 2013, the rebate free class (AN) of Kempen (Lux) Euro Credit Fund was launched. The results shown of the period 30 January 2012 until 23 July 2013 are those of class A of the same fund. The higher management fee of Class A has had an impact on the performance quoted. On 20 June 2013, Kempen Euro Credit Fund (KECF) was merged with Kempen (Lux) Euro Credit Fund. Up to 30 January 2012 (start of the Fund’s A class) the performance graph and performance table show the performance of KECF. The average annual TER for the period of April 2008 till June 2013 is 0.91%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 1,282.46 M 2021-02-28
Share class size
EUR 33.44 M 2021-02-28
Number of shares
1,034,947 2021-02-28
Net Asset Value i
EUR 32.44 2021-04-08
Turnover rate
253.44 %
Morningstar rating â„¢
Morningstar Analyst rating
Neutral
The turnover rate figure is per the end of the financial year of the fund and will be updated once a year.

Fund characteristics per 2021-02-28

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  Fund Benchmark
Number of holdings 316 3143
Duration i 5.5 5.3
Yield to maturity 0.6 %
Weighted rating A- BBB+
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Developments per 2021-02-28

In February, the spread on the iBoxx Euro Corporate Index tightened by 1 basis point to 97 basis points above the government bond curve and 71 basis points over de swap curve. The index earned an absolute return of -0.78%. German 10-year government bond yields closed February at -0.26%, representing an increase of 26 basis points compared to the end of January.

February was a volatile month for credit. In the first two weeks of the month credit performed strongly. The appointment of Mario Draghi as Italian Prime Minister helped market sentiment, as this was not only good news for Italy but also for the European integration in general. Also the economic development remained supportive. Although not great, the manufacturing PMI’s continue to point at growth of the manufacturing sector. This was however consumed by a weaker services segment that continued to decline. Especially the services segments in Italy, Spain, UK and Ireland remain weak, as a result of the strict lockdowns in these countries. Generally speaking the manufacturing sector continues to do well and in both Europe and the US economic data is improving.

Sentiment changed however in the second half of the month. A strong rise in yields resulted in a selloff in credits and as a result an increase in spreads. The rise in yields was caused by expectations of stronger growth and inflation, which in turn increase the probability of monetary tightening by central banks. In Europe the 10-year yield on German government paper increased by 26 bps to -0.26%. In the US the increase in yields was even stronger with an increase of 34 bps to a level of +1.4%. At the end of the month yields did come down a bit after comments by Jerome Powell from the Federal Reserve. He commented on the rise in yields and stated that the Fed would clearly communicate any change in policy. Also the ECB officials reacted by saying that they are watching the bond yields and hinted at the possibility to increase the purchases of government bonds under the PEPP program in order to push yields lower again, as a measure to avoid further tightening of fiscal conditions.

The pandemic continued to have an influence on markets. As per the end of the month John Hopkins reported the number of global fatalities now surpassed the 2.5 million mark. Over the month of February we saw the number of new daily cases slowing compared to the beginning of the year, but with very divergent development between countries. For instance in France the development could result in stricter measures starting early March, whilst in the UK the picture continues to improve. On the vaccine front there was further positive news, as numbers coming from countries with high vaccination rates confirm that the vaccinations are effective. Also the Johnson and Johnson vaccine was approved by the FDA and expectations are that the vaccine will be approved in the EU as well in early March. This increases the prospect of higher vaccination rates in the coming period and improves the chances of a gradual reopening of the economies.

On the fiscal side support remains strong. Resulting in higher growth forecasts, mainly for the US. One of the big reasons for higher growth forecasts in the US has been the Biden stimulus package with a size of 9% of the US GDP. Also the economic data coming out of the US is strong. Retail sales in the US increased by 5.3% over January. Also business activity surveys continue to improve, indicating stronger economic growth. With already 21% of the population vaccinated, the US is clearly ahead of the EU, providing further upside to growth expectations compared to the EU.

Company earnings season is coming to its end. Per end of the month almost 90% of the companies in the US reported and around 70% in Europe. Overall the number of positive sales and earnings surprises in the US has been strong. On average over 80% of the companies in the US surprised positively on earnings. The size of those beats are roughly in line with last quarter at 17%, which is close to the highest on record. Also in Europe companies have, in majority, reported better results than expected. With close to 50% reporting better than expected results they are clearly lagging their US counterparts.

The demand for credit is still strong, despite the relatively low volumes that are bought by the ECB. In February the net purchases done by the ECB under its CSPP program amounted to €3.4 billion in corporate bonds. This was significantly lower than the amount they can buy under the CSPP program and also lower than the €4.9 billion they bought in January. Supply of corporate bonds in February amounted to just €26 billion, with net supply at €10 billion. Sector wise real estate and energy are responsible for a big part of the year to date issuance with in total €13 billion and €16 billion respectively issued this year. Due to the ongoing strong demand for corporate bonds, new issue premiums have been little to non-existent this year relative to this time last year (pre-crisis) when new issue premiums were strong. Many new issues have been priced through their curves. Supply of corporate hybrids is up significantly to €12 billion year-to-date versus €6 billion last year and just €3 billion in 2019. Many corporates continue to issue hybrids to support their ratings and to refinance maturing hybrids. Financials supply was much stronger with €30 billion in supply in February.

In February the travel and leisure sector was one of the better performing sectors. The sentiment improved a bit on the back of a more positive outlook on travel in the medium term. The pathway out of the crisis painted by Prime Minister Boris Johnson resulted in a strong recovery in the credit spreads from airlines. One of the sectors that lagged in February was the automotive sector. The sector is facing relatively big disruptions from a semiconductor shortage. This shortage is a result of overly conservative demand estimates made early last year when automotive OEM’s closed down their plants to cope with the onset of the pandemic. However, as vehicles sales rebounded, contract chipmakers had already allocated production capacity to others, leading to the bottlenecks seen today. Based on sector comments these shortages could continue well into 2Q21. The supply disruptions could result in a 7%-9% lower production rate in the first half of 2021.

During the month, the portfolio’s sensitivity to market trends varied between 105% and 110%. The portfolio therefore held an overweight positioning in terms of market risk.

Our positioning in infrastructure, industrial goods and utilities performed relatively well in February. Our position in banks and technology had a small negative impact on performance.

At individual company level, positive contributions came from the overweight in Frankfurt Airport and subordinated bonds from Iberdrola that performed relatively well. Also the overweight in GE and Abertis contributed positively. Our underweight in Easyjet contributed negatively as their bonds performed strongly on the back of the improved sector outlook. Our overweight in AT&T suffered as the longer dated bonds underperformed due to the rising interest rate, resulting in steeper spread curves on AT&T.

In February the Fund participated in new deals from amongst others NTT, Cellnex and subordinated bonds from Iberdrola. As new issue premiums are very limited and all in valuations look increasingly stretched, especially on the long end, we take a conservative approach towards participating in new issues.

Outlook
We remain mildly constructive on the market. Although we see the significant positive effect that a working vaccine will progressively have on the economy in the longer term, we do remain concerned on the near term economic growth expectations. We expect economic growth momentum to continue to be weak in the near term, but have a positive view on a 3-6 month horizon with a recovery expected by the end Q2. Especially for the US we have strong growth expectations. This does however increase the risk of a more restrictive monetary policy. Companies remain very much bond holder focussed. This supports the fundamental quality. However after the rally in 2020 valuations are starting to look expensive. Finally, the technical backdrop still remains very robust as a result of the ECB’s willingness and ability to provide liquidity to the government and corporate bond markets combined with limited net supply.

Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2021-02-28 (rebased)

No chart data available

Performance per 2021-02-28

Slide to see more
  Fund Benchmark
1 month -0.8 % -0.8 %
3 months -0.8 % -0.8 %
This year -1.0 % -0.9 %
2018 -0.8 % -1.3 %
2019 6.7 % 6.3 %
2020 3.8 % 2.7 %
1 year (on annual basis) 1.8 % 1.0 %
3 years (on annual basis) i 3.0 % 2.3 %
5 years (on annual basis) i 3.0 % 2.5 %
Since inception (on annual basis) i 5.1 % 4.2 %
On 23 July 2013, the rebate free class (AN) of Kempen (Lux) Euro Credit Fund was launched. The results shown of the period 30 January 2012 until 23 July 2013 are those of class A of the same fund. The higher management fee of Class A has had an impact on the performance quoted. On 20 June 2013, Kempen Euro Credit Fund (KECF) was merged with Kempen (Lux) Euro Credit Fund. Up to 30 January 2012 (start of the Fund’s A class) the performance graph and performance table show the performance of KECF. The average annual TER for the period of April 2008 till June 2013 is 0.91%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
No
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Maturity profile (2021-02-28)

Fund
Benchmark
28.0 %
5-7 year
22.1 %
27.9 %
3-5 year
26.1 %
16.6 %
7-10 year
16.7 %
16.1 %
0-3 year
24.7 %
11.0 %
> 10 year
10.3 %
0.4 %
Cash
0.0 %
0.1 %
Other
0.0 %
Total
100 %
100 %

Sector allocation (2021-02-28)

31.2 %
Banks
13.9 %
Consumer Goods & Services
9.6 %
Telecom & Technology
8.9 %
Health Care
8.8 %
Industry
8.7 %
Utilities
7.9 %
Financial Services & Real estate
3.8 %
Insurance
3.7 %
Energy
2.1 %
Other
1.5 %
Basic Materials
Total
100 %
The cash position is included in ‘Other’.

Rating allocation (2021-02-28)

Fund
Benchmark
0.0 %
AAA
0.3 %
4.1 %
AA
9.7 %
40.4 %
A
38.6 %
50.0 %
BBB
51.5 %
4.0 %
BB
0.0 %
1.3 %
Not Rated
0.0 %
0.4 %
Cash
0.0 %
Total
100 %
100 %
The rating allocation of the Fund is based on the Bloomberg Composite method. The rating allocation of the benchmark is based on the rating allocation used by provider Markit iBoxx.

Top 10 holdings (2021-02-28)

1.0 %
0.500% Wells Fargo 2019-24
1.0 %
1.875% General Electric 2015-27
0.9 %
3.000% Volkswagen Fin Serv 2020-25
0.9 %
0.000% Enel 2019-24
0.8 %
0.637% Morgan Stanley 2019-24
0.8 %
0.250% Daimler 2019-23
0.8 %
1.125% Orange 2019-24
0.7 %
0.500% BNP Paribas 2019-25
0.7 %
0.500% Banque Fed Cred Mutuel 2018-22
0.7 %
2.500% Danaher 2020-30
Total
8.3 %
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.320 %
Service fee i
0.10 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
0,47 %
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
AN i
Investor type
Private
Distributing
No
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
No
Investment category
Credits
Universum
Credits denominated in euro
Inception date
2013-07-23
Domicile
Luxembourg
May be offered to all investors in
Belgium, Luxembourg, Switzerland, The Netherlands, United Kingdom
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢
Morningstar Analyst rating
Neutral

Tradability

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Minimum subscription
Initial subscription €1
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0927664200
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Kempen's vision and 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.

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Our full voting records are available here.

Climate change

As a long-term investor, we believe climate change represents a systemic risk facing the economy, society and environment. We want to consider the risks and opportunities this presents to our investments in the coming decades. We have therefore set a long-term commitment (2050), a mid-term ambition (2030) and short-term objectives (2025).

  • 2050 commitment: Net-zero investor.  Â
  • 2030 ambition: To align with a Paris Agreement pathway (listed and non-listed investments) and Dutch Klimaatakkoord.  Â
  • 2025 objectives: To align with a pathway towards achieving the Paris Agreement (listed investments) and Dutch Klimaatakkoord goals.[1]

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The Kempen climate change policy can be found here (under climate change policy).

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[1]We use carbon intensity as a metric to come to the pathway of net-zero emissions. As we care about the direction of travel and reduction of carbon emissions in the economy, it might be that the actual reducing trend may deviate from the suggested average trend line. The pathway is derived from the pathway of the EU Benchmarks.

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 and impact.

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1. Exclusion

In line with the general Kempen policy, the Kempen Euro Credit Strategies[2] exclude all companies on the KCM exclusion- or avoidance list. Companies on these lists are either involved in the production of controversial weapons, they derive a significant portion of their revenues from the production or distribution of tobacco, or have been involved in serious controversies. In addition, we exclude pure coal players and pure players involved in tar sands, as these activities have an adverse impact on climate change.

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2. ESG Integration

Responsible Investment in the Kempen Euro Credit Strategies is not limited to the exclusion of companies. Rather, ESG criteria are an integral part of the investment process. To form a fundamental opinion on a company, the portfolio managers assess the business profile, the financial profile and the ESG profile. Research provided by MSCI ESG Research LLC is used as a basis for the ESG assessment.  Â

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A low score on ESG criteria can result in the demand for an additional premium on the company’s bonds and/or initiation of an engagement with the issuer. If ESG risks are deemed too severe, an investment in the company will be avoided and/or existing holdings will be sold.

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On a quarterly basis, the Kempen Responsible Investment team screens the holdings of the Kempen Euro Credit Strategies, and discusses the findings with the portfolio managers. Special attention is paid to companies scoring an MSCI ESG rating of B or lower, those with a ‘fail’ marked against the criteria of the UN Global Compact or those companies that attract a red flag on the MSCI ESG impact monitor. Companies in carbon intensive sectors are also given special attention. We prefer to invest in companies that integrate climate risks and opportunities into their organisation, and are able to move towards a low- carbon economy.

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3. Active Ownership

For our Kempen Euro Credit Strategies, we distinguish between three types of engagement. They are i) an engagement for awareness, ii) an engagement for change, and iii) a public policy and/or systemic engagement. Engagement for awareness is aimed at raising awareness on certain issues with a company and/or collecting more information on a specific ESG issue. Engagement for change, which could follow an engagement for awareness, has the goal of achieving a specific SMART goal. The third form of engagement relates to seeking an improvement in a public policy or a system relevant to wider capital markets

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Our engagement process defines four milestones:

1. Raise concern with the company;

2. Company acknowledges the issue;

3. Company sets out a strategy / agrees to improve;

4. Company implements the strategy. Â

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Our engagement could start at any of the first three milestones. When a milestone is reached, a document of proof is attached to the engagement case and the engagement will move on to the following milestone. When the fourth milestone is reached, the engagement is closed, but we continue to monitor the company. If at any stage the company refuses to cooperate, divestment has to be considered. To measure willingness to cooperate, we set specific timelines for the engagement. With regard to climate change, we engage generally and take a sector-specific approach for the most carbon-intensive companies and sectors (oil and gas, utilities), as these count for the largest part of the global carbon emissions.

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The Kempen Euro Credit Strategies, began an engagement with Bayer in 2018, following their acquisition of Monsanto. Through the acquisition, Bayer inherited several significant controversies in the field of genetically modified organisms (GMOs). The goal of our engagement is to get a formal and written statement from the company which states that they will not sue small holder farmers for the unintended use of Bayer licensed GMO crops. It also asks the company to set a target for the number of farmers that receive education on their crop protection products.

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In addition we have ongoing engagement cases with Volkswagen on its company culture, Cez on the use of thermal coal (you can find the engagement factsheet here). We do this direct and collaborative via the Climate Action 100+ engagement initiative.

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4. Impact

With regard to climate change we prefer:

  • Green bonds over non-green bonds if the risk-returns are similar. We have (as stated in the 2025 objectives) a green bond target on a ‘comply or explain’ basis (e.g. it must fit with the investment strategy). Targets need to be relevant, although the investment strategy characteristics need to be taken into account.
  • Sustainable (-Linked) / SDG-Linked bonds over non-sustainable / SDG-Linked bonds if the risks-returns are similar. Note that as with green bonds, there are criteria for these bonds and these will be assessed on a case-by-case basis.

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[2] The Kempen (Lux) Euro Credit Fund, Kempen (Lux) Euro Credit Fund Plus, Kempen (Lux) Euro Sustainable Credit Fund and Kempen (Lux) Euro High Yield Fund

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.
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Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.