Kempen Lux Euro Credit Fund Plus - Class I

Profile

Kempen International Funds SICAV - Kempen (Lux) Euro Credit Fund Plus (the Fund) invests primarily in credits that have an investment grade rating (of minimal BBB-) and mostly 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. This is realized by also using non-investment grade bonds. In addition, instruments such as asset backed securities, credit default swaps and loans listed in other currencies can be used. In the process there will be explicitly looked at efficient use of these instruments and with particular attention to managing investment risks of the portfolio as a whole. 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.

It has been decided to soft open the Fund as per 22 February 2018. The Fund will accept daily inflow below EUR 2 million from both existing and new investors. For investments greater than EUR 2 million please contact the Fund’s relationship manager. More information about the soft open can be found in the Notice to shareholders in the tab Documents.

Management team

Alain van der Heijden, Harold van Acht

Performance per 2020-10-31 (rebased)

No chart data available

Performance per 2020-10-31

Slide to see more
  Fund Benchmark
1 month 0.8 % 0.8 %
3 months 1.3 % 1.3 %
This year 2.7 % 1.5 %
2017 2.6 % 2.4 %
2018 -0.9 % -1.3 %
2019 7.0 % 6.3 %
1 year (on annual basis) 2.4 % 1.2 %
3 years (on annual basis) i 2.8 % 2.0 %
5 years (on annual basis) i 3.4 % 2.7 %
Since inception (on annual basis) i 3.8 % 3.0 %
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

Slide to see more
Total fund size
EUR 315.37 M 2020-10-31
Share class size
EUR 150.89 M 2020-10-31
Number of shares
116,841 2020-10-31
Net Asset Value i
EUR 1,305.75 2020-11-24
Turnover rate
199.47 %
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 2020-10-31

Slide to see more
  Fund Benchmark
Number of holdings 302 3101
Duration i 5.2 5.3
Yield to maturity 0.6 %
Kempen (Lux) Euro Credit Fund Plus (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 2020-10-31

In October, the spread on the iBoxx Euro Corporate Index tightened by 8 basis points to 120 basis points above the government bond curve and 93 basis points over de swap curve. The index earned an absolute return of +0.79%. German 10-year government bond yields closed September at -0.62%, representing a decrease of 10 basis points compared to the end of September.

After a number of months during the summer season when it appeared that developed countries had gotten control over the Covid-19 virus, the number of infections in numerous countries continued to increase in October. This is again forcing governmental authorities to reinstate restrictions on social activity. The risk of further lock down measures materialised in the month of October. Especially in Europe governments were forced to implement new restrictive measures. The measures that are so far implemented are aimed at reducing the level of social interaction. Governments have in some countries implemented curfews. But in most cases measures have been limited to closing bars and restaurants, restrictions on visiting cultural & sport events, put limitations on the group sizes that are allowed and restrict travelling. Whether additional measures will be needed very much depends on the effectiveness of these measures. We continue to believe that the likelihood of a broad based full “lockdown” being implemented is still relatively low. This is because governments are keen to avoid a repeat of the severe decline in economic activity that occurred in the second quarter, given its disastrous consequences for employment, fiscal deficits and the financial solidity of businesses. Furthermore, the manufacturing sector is much better positioned this time around to maintain production levels whilst operating in a manner that safeguards the health of their employees. Having said this, segments of the economy that are most dependent on people socially interacting with each other, particularly airlines, restaurants and the broader travel & leisure sector, are again experiencing a deterioration in economic activity, putting additional pressure on already weakened credit profiles.

On the monetary policy front, the ECB left its monetary policy unchanged as expected. But the ECB clearly hinted at additional policy measures. And the need for additional monetary easing is clear. The economic recovery is losing momentum more rapidly than the ECB expected, due to renewed lockdowns. According to ECB-president Lagarde economic indicators are softening significantly, implying a clear deterioration of the near-term outlook. In its September economic projections, the ECB foresaw GDP growth of 8.4% QoQ in the third quarter (after the -15% plunge in the first half of the year), to be followed by 3.1% QoQ in the final quarter. Even though the growth rate for the third quarter may surprise somewhat positively, the growth rate for the fourth quarter looks way to optimistic, as Lagarde acknowledged. With renewed lockdowns in most eurozone countries, negative growth in the fourth quarter looks very well possible. The inflation picture also looks weak. Headline inflation was -0.3% in September and will likely stay negative into early next year. As this is partly due to temporary factors, such as a drop in oil prices, a VAT cut in Germany and the timing of the clothing sale season, the ECB argues that this is not deflation. But core inflation dropped to only 0.2% in September, far below the ECB’s target of below, but close to 2%. Furthermore, the ECB’s Bank Lending Survey showed that banks have tightened credit standards for firms an households.

Thus, recalibration is on the way. Lagarde left all options open. All tools are under consideration both in terms of levels as in terms of composition. Still, an increase in the PEPP looks most likely. With a vaccine coming available somewhere next year, the corona pandemic should be temporary, as such a temporary tool as the PEPP looks most suitable. An increase with EUR 500 billion could be announced in December. This will also have an impact on inflation expectations and nominal yields. We do expect that nominal yields will remain low. Lower real yields would give additional support to the economy.

In the US all eyes are on the outcome of the presidential elections. Whether Biden or Trump will win is likely to be a close call. More important for markets is whether the new president will have a majority in the Senate and Congress. Especially in case Biden would win without taking the senate the hopes in a massive stimulus package might be proven idle.

On the corporate front October was dominated by the release of 3rd quarter earnings. Generally speaking the earnings season provided a record in earnings-beats relative to expectations. However the absolute decline in earnings was again large and continuous to weigh on fundamentals. On average the outlooks for the remainder of 2020 remained largely unchanged. The only sectors that showed tangible improvements in EBIT expectations compared to earlier this year were the automotive and basic resources sector. For the auto sector it is mainly the very strong recovery of the car market in China that resulted in much better results and a more positive outlook. Obviously the dispersion in sectors is large, and Oil & Gas and Travel & Leisure sectors saw their expectations decline even further.

During the month, bonds issued by companies operating in the retail, construction, automotive and industrial sectors outperformed. By contrast, bonds issued by companies operating in the banking, insurance, oil & gas sectors and technology sector underperformed. In particular, subordinated bonds issued by banks and insurers again underperformed. Oil is year to date the worst performing sector.

The supply of new bonds eased in October in line with seasonal patterns as earnings announcements and a pick-up in risk aversion lowered issuance of new bonds. The total amount of Euro denominated investment grade issuance was EUR 40.4 billion in October, a drop of close to EUR 15 billion or 25% from September levels and 33% lower than the same month last year. Non-financial sector companies issued EUR 22 billion in new bonds last month, while financial sector companies issued EUR 18 billion in new bonds. During the first ten months of this year, a total of EUR 580 billion of bonds was issued. This represents a 6% increase compared to the year-earlier period.

During the month, the target 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 the telecommunications, health care and bank sectors performed relatively well in October. In contrast, our positioning in the retail and industrial goods sectors contributed negatively. Our liquidity position (in the form of cash and government bonds) also had a negative impact.

At individual company level, positive contributions came from the overweights in Groupe Bruxelles Lambert, that continued to benefit from the fact that it got a credit rating of A1, AT&T and Scentre Group. Also the pair trade Scania versus Volvo and the credit risk hedged position in Continental performed well. In contrast, the overweights in Frankfurt Airport, British Petroleum and Euronet contributed negatively.

In October, the Fund participated in new issues from amongst others Dublin Airport, subordinated bonds issued by Veolia and Iberdrola, a new issue from Swedish residential property company Akelius, from Austrian office owner CA Immobilien and a new issue from La Banque Postale.

Outlook
Despite the ongoing flare up in the number of Covid-19 infections, we remain mildly constructive on the market. We are however more concerned on the economic growth expectations mainly in Europe. We expect economic growth momentum to slow down. Companies remain very much bond holder focussed. This supports the fundamental quality. Finally, the technical backdrop still remains very robust as a result of the ECB’s willingness and ability to pump liquidity into the government and corporate bond markets.

Kempen (Lux) Euro Credit Fund Plus (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 2020-10-31 (rebased)

No chart data available

Performance per 2020-10-31

Slide to see more
  Fund Benchmark
1 month 0.8 % 0.8 %
3 months 1.3 % 1.3 %
This year 2.7 % 1.5 %
2017 2.6 % 2.4 %
2018 -0.9 % -1.3 %
2019 7.0 % 6.3 %
1 year (on annual basis) 2.4 % 1.2 %
3 years (on annual basis) i 2.8 % 2.0 %
5 years (on annual basis) i 3.4 % 2.7 %
Since inception (on annual basis) i 3.8 % 3.0 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

Slide to see more
Distributing
No
Kempen (Lux) Euro Credit Fund Plus (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 (2020-10-31)

Fund
Benchmark
24.8 %
5-7 year
21.8 %
24.5 %
3-5 year
25.5 %
18.3 %
0-3 year
25.4 %
16.5 %
7-10 year
16.7 %
12.7 %
> 10 year
10.6 %
3.3 %
Cash
0.0 %
Total
100 %
100 %

Sector allocation (2020-10-31)

29.6 %
Banks
13.5 %
Consumer Goods & Services
10.0 %
Telecom & Technology
8.3 %
Health Care
8.1 %
Industry
7.8 %
Utilities
7.6 %
Financial Services & Real estate
4.7 %
Other
3.8 %
Insurance
3.2 %
Energy
1.8 %
Basic Materials
1.7 %
Sovereign bonds
Total
100 %
The cash position is included in ‘Other’.

Rating allocation (2020-10-31)

Fund
Benchmark
1.7 %
AAA
0.4 %
2.6 %
AA
10.4 %
34.1 %
A
39.0 %
53.3 %
BBB
50.2 %
3.4 %
BB
0.0 %
1.6 %
Not Rated
0.0 %
3.3 %
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 (2020-10-31)

1.7 %
1.250% KFW 2016-36
1.2 %
1.600% AT&T 2020-28
0.9 %
0.736% Bank of America 2017-22
0.9 %
0.375% Caixabank 2020-25
0.9 %
0.500% Wells Fargo 2019-24
0.8 %
0.000% Novartis 2020-28
0.8 %
0.000% Enel 2019-24
0.8 %
1.875% General Electric 2015-27
0.8 %
3.000% Volkswagen Fin Serv 2020-25
0.7 %
3.375% Volkswagen 2018-24 PERP
Total
9.6 %
Kempen (Lux) Euro Credit Fund Plus (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

Slide to see more
Management fee i
0.42 %
Service fee i
0.10 %
Taxe d'abonnement i
0.01 %
Expected ongoing charges i
0,53 %
Kempen (Lux) Euro Credit Fund Plus (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

Slide to see more
Share class
I i
Investor type
Institutional
Distributing
No
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
No
Investment category
Credits
Universum
Credits
Inception date
2013-12-10
Domicile
Luxembourg
May be offered to professional investors only in
Belgium, France, Germany, Italy, Luxembourg, Sweden, 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

Slide to see more
Minimum subscription
Initial subscription: €50,000, additional subscriptions: €10,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0986645306
Kempen (Lux) Euro Credit Fund Plus (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 Plus (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.

Â

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.

Â

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

Our full voting records are available here

Â

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.

Â

1. Exclusion

In line with the general Kempen policy, the Kempen Euro Credit Strategies[1] 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.

Â

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

Â

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.

Â

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.

Â

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

Â

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

Â

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.

Â

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.

Â

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), Glencore on climate action (you can find the engagement factsheet here) and Huntsman on ESG disclosure. In July 2018, Huntsman was upgraded from ‘CCC’ to ‘B’ by MSCI ESG, and the company’s Sustainability report, published in 2018, includes an overview of its progress towards alignment with the UN Global Compact Ten Principles for the first time.

Â

[1] 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:

Â

*

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
Bron EN
disclaimer
Kempen (Lux) Euro Credit Fund Plus (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.