Kempen Lux Euro Credit Fund Plus - Class ID

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.

In the interest of the shareholders it has been decided to soft close the Fund as per 5 January 2016. The Fund will continue to accept daily inflow below EUR 5 million from only existing investors. For investments greater than EUR 5 million please contact the Fund’s relationship manager. Redemptions will still be possible. More information about the soft close can be found in the Notice to shareholders in the tab Documents. The objective of the duration hegded share class ID is to hedge the interest rate exposure of the portfolio and by that reduce the impact of changes in the German Sovereign Curve on the return of the share class.

Management team

Alain van der Heijden, Rik den Hartog, Heinie Hakker, Harold van Acht, Sipke Moes, Luuk Cummins, Pim van Mourik Broekman, Quirijn Landman

Performance per 2017-07-31 (rebased)

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Performance per 2017-07-31

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  Fund
1 month 0.5 %
3 months 1.1 %
This year 1.7 %
2014 2.3 %
2015 -0.5 %
2016 1.8 %
3 years (on annual basis) i 1.2 %
Since inception (on annual basis) i 1.5 %
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 329.56 M 2017-07-31
Number of shares
32,376 2017-07-31
Net Asset Value i
EUR 1,055.71 2017-08-18
Morningstar rating â„¢

Fund characteristics per 2017-07-31

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  Fund Benchmark
Number of holdings 252 2048
Duration i 0.0 5.3
Weighted rating A- BBB+
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Market developments per 2017-07-31

In July, the spread of the iBoxx Euro Corporate Index tightened by 8 basis points to 103 basis points above the government bond curve. The index earned an absolute return of 0.78%. German 10-year government bond yields closed July up at 0.54%, 7 basis points higher than at the end of June.

The positive sentiment on the credit market was chiefly driven by three developments in July.

Firstly, the relatively solid corporate results over the second quarter have further calmed investors’ concerns about the trend in creditworthiness at companies. At banks, for instance, the recovering European economy is causing a decrease in the provisions they need to make for bad loans and at the same time supporting demand for banking services. This is positive for their income from commissions. The stronger European economy and strengthening conviction about the tenability of the European currency union have also triggered an upturn on the secondary market for bad loans, allowing banks in the peripheral EU countries in particular to clean up their balance sheets more quickly. Non-financial institutions are also profiting from the pick-up in economic growth, but also from the specific recovery in sectors that were under severe pressure until very recently, including the oil & gas, mining and agricultural sectors.

Secondly, Mario Draghi has reassured the markets that an accelerated tapering of the ECB’s bond-buying programme is not imminent. In his speech on 20 July, Draghi stressed that a highly-expansionary monetary policy is still needed for the time being in order to achieve the long-term 2% inflation target. In doing so, Draghi moderated the comments he made in June, when he indicated that deflationary forces in Europe were being replaced by reflationary ones. Despite no official confirmation from the ECB, , it looks as if its programme to buy corporate bonds, the Corporate Sector Purchase Programme (CSPP), has not been reduced proportionally in line with the tapering of the QE programme since April of this year.

The final positive development on the market was the very small number of new corporate bonds issued. In July the supply of new bonds was EUR20.2 billion, i.e. down by about 62% on June and by 17% compared to July 2016. Non-financial sector institutions issued EUR13.0 billion in new bonds last month, while financial sector institutions issued EUR7.2 billion in new bonds. During the first seven months of this year, the supply of new bonds amounted to EUR341.9 billion, a slight drop of 5% compared to last year.

Portfolio developments per 2017-07-31

Across the month, the portfolio’s sensitivity to market trends varied between 110% and 118%. The portfolio therefore held an overweight positioning in terms of market risk.

Our positioning in the utility, industrial goods and telecom sectors performed relatively well in July. In contrast, our positioning in the non-banking financial services, personal household goods and energy sectors contributed negatively. Our liquidity position (in the shape of cash and government bonds) also contributed negatively.

At company level, a positive contribution came from the overweights in AT&T, CTE, Allianz and Partner Re and from the underweight in Daimler. Conversely, the underweights in Groupama and Credit Mutuel and the overweights in Volkswagen and Schaeffler contributed negatively.

Our pair trades contributed slightly positive, in particular the long position in International Game Technology versus the short position in Casino and the long position in Air Liquide versus the short position in BMW. The long position in Imperial Brands versus the short position in Volvo contributed negatively. The positive basis trades in Simon Property Group and Glencore contributed negatively. At the end of July, the global exposure of the Fund was 126%.

In July, the Fund participated in new bond issues by Nationwide Building Society (subordinated), Unilever, ALD, Steinhoff, National Grid, Sodexho, ADO Properties and Atlantia.

Outlook
Indices that measure volatility have fallen to their lowest levels in ten years. The corporate bond market is also experiencing extremely low volatility. This is in spite of a variety of risks, including: 1) tightening monetary policy (including interest rate hikes in the US and a reduction in the size of the Fed’s balance sheet; potential further tapering of the ECB’s bond-buying programme) which could have a negative impact on future economic growth; 2) growing pressure from activist shareholders on management teams to take steps to create shareholder value in the short term which could in fact weaken companies’ creditworthiness and ability to innovate in the long term; 3) the rapid rise of new technologies that could undermine existing business models in e.g. the retail, auto and energy sectors; and 4) a steady decline in the capacity of the West to safeguard geopolitical stability and security in the world and the erosion of consensus on the benefits of free trade and multilateral cooperation.

We are concerned about the discrepancy between the risks outlined above and the lack of volatility in the market. The historically less attractive spreads and the small amount of dispersion currently present in spread premiums that companies with wide-ranging levels of creditworthiness are having to pay in order to finance their activities are also causes for concern. For this reason, in spite of the improving economic climate in Europe and the persisting support for the credit market deriving from the ECB’s CSPP, we plan to maintain our relatively conservative positioning in the short term.
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Performance per 2017-07-31 (rebased)

No chart data available

Performance per 2017-07-31

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  Fund
1 month 0.5 %
3 months 1.1 %
This year 1.7 %
2014 2.3 %
2015 -0.5 %
2016 1.8 %
3 years (on annual basis) i 1.2 %
Since inception (on annual basis) i 1.5 %
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 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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Maturity profile (2017-07-31)

Fund
Benchmark
20.4 %
0-3 year
21.1 %
14.7 %
3-5 year
27.5 %
29.7 %
5-7 year
21.3 %
15.3 %
7-10 year
21.9 %
14.9 %
> 10 year
8.3 %
4.9 %
Cash
0.0 %
Totaal
100 %
100 %

Sector allocation (2017-07-31)

28.3 %
Banks
17.1 %
Consumer Goods & Services
8.3 %
Financial Services & Real estate
8.2 %
Telecom & Technology
7.2 %
Utilities
5.9 %
Other
5.5 %
Industry
5.4 %
Insurance
3.1 %
Energy
3.0 %
Basic Materials
2.9 %
Sovereign bonds
2.1 %
Asset Backed Securities
2.1 %
Health Care
0.9 %
Supranational
Totaal
100 %
The cash position is included in ‘Other’.

Rating allocation (2017-07-31)

Fund
Benchmark
6.7 %
AAA
0.6 %
4.6 %
AA
11.1 %
32.9 %
A
39.3 %
40.0 %
BBB
49.0 %
6.1 %
BB
0.0 %
4.7 %
Not Rated
0.0 %
4.9 %
Cash
0.0 %
Totaal
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 (2017-07-31)

2.4 %
2.500% Duitsland 2010-21
1.0 %
1.375% Goldman Sachs 2017-24
0.9 %
1.000% Credit Suisse 2016-23
0.9 %
4.000% Intesa SanPaolo 2010-18
0.9 %
0.750% BNP Paribas 2016-22
0.8 %
1.500% SEB 2017-24
0.8 %
0.875% ENGIE 2017-24
0.8 %
1.125% Svenska Handelsbanken 2015-22
0.8 %
1.379% Bank of America 2017-25
0.8 %
2.500% Carlsberg Breweries 2014-24
Totaal
10.2 %
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Ongoing charges

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Management fee i
0.42 %
Service fee i
0.10 %
Taxe d'abonnement i
0.01 %
Expected ongoing charges i
0,53 %

Other costs

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Upward swing factor i
0.25 %
Downward swing factor i
0.25 %
More about our swing pricing policy
The swingfactor is applicable if the sum of in and outflow (end trading day) is more than a pre defined percentage ( the so called ‘threshold’) of the fund size. The level of the threshold can vary; investors can request KCM for information about the thresholds that were applied in the past. As of 7 July 2015 the swing factor has been adjusted from 0.20% to 0.25%.
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Share class details

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Share class
ID i
Investor type
Institutional
Distributing
No
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
Yes
Investment category
Credits
Universum
Credits
Inception date
2013-12-10
Domicile
Luxembourg
Registered in
Belgium, France, Germany, Italy, Luxembourg, The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢

Tradability

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Minimum subscription
Initial subscription: €50,000, additional subscriptions: €10,000
Listed
no
Pricing frequency
Daily
ISIN i
LU0986645561
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies.

Fund approach to Responsible Investment

The Kempen credit funds do not invest in companies that are either on the KCM exclusion or avoidance list. The focus in Kempen (Lux) Euro Credit Fund and Kempen (Lux) Euro Credit Fund + lies with the worst performing companies in terms of ESG. Companies that have a MSCI ESG rating ? B (on a scale where AAA is the highest and CCC is the lowest), a fail on the UN Global compact or a red flag on Impact Monitor, are selected for further analysis. Our sector specialist assesses the materiality of the ESG issue and its implications for the credit profile of the company. If an issue is deemed material, our first objective is to engage with the company on the issue. If we can conclude from the engagement that the ESG concerns are not structural and if the company is willing to improve, we make an adjustment in the determination of the relative value of the company's securities. In severe cases where we do not see any prospect of improvement we forego investment in the company.

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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.