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 2017-09-30 (rebased)

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Performance per 2017-09-30

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  Fund
1 month 0.2 %
3 months 0.2 %
This year 1.4 %
2014 2.3 %
2015 -0.5 %
2016 1.8 %
3 years (on annual basis) i 1.0 %
Since inception (on annual basis) i 1.4 %
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 405.87 M 2017-09-30
Number of shares
31,733 2017-09-30
Net Asset Value i
EUR 1,057.08 2017-10-20
Morningstar rating â„¢

Fund characteristics per 2017-09-30

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  Fund Benchmark
Number of holdings 248 2088
Duration i -0.1 5.2
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 2017-09-30

In September, the spread of the iBoxx Euro Corporate Index tightened by 4 basis points to 107 basis points above the government bond curve. The index earned an absolute return of -0.22%. German 10-year government bond yields finished September at 0.46%, 10 basis points higher than at the end of August.

In September, the ECB failed to provide clarity on how it intends to scale back its bond-buying programmes next year. However, it is becoming clear that the Corporate Sector Purchase Programme, or CSPP, has not been reduced proportionally in line with the initial tapering of the QE programme. Earlier this year, this programme was reduced from EUR80 billion to EUR60 billion per month. The ECB purchased approximately EUR8 billion in credits in September. This means that the ECB now holds about 10% of all eligible corporate bonds.

In addition to the ECB’s steady purchase of credits, strong inflows into the investment grade credits asset class was another important cause of spread tightening in September. This positive technical climate ultimately outweighed the numerous concerns currently preoccupying investors. These included the geopolitical crisis in Korea, potential further interest rate hikes by the Fed and plans to reduce the size of its balance sheet, growing constitutional tensions between the Spanish and Catalonian governments and the economic losses caused by a series of hurricanes in the US and Caribbean islands.

One sector in which spreads did respond to the losses caused by the hurricanes was the reinsurance sector. Having already been confronted with the prospect of higher claims in the wake of Hurricane Harvey at the end of August, the sector was hit by two further hurricanes (Irma and Maria) and a severe earthquake in Mexico. So far, it seems likely that these events will chiefly have an impact on the third-quarter earnings of reinsurers and to a much lesser extent on their solvency levels. Nevertheless, concerns about the sector’s capital position could arise if additional disasters occur in the near future and if the reinsurance sector has not yet been able to raise premiums significantly.

Two relatively large acquisitions were announced in September. United Technologies, a US industrial conglomerate, wants to take over fellow aerospace industry company Rockwell Collins for about USD30 billion. Given that United Technologies wishes to finance the acquisition primarily with debt, S&P, Moody’s and Fitch have announced that they will review their current ratings, noting that it is highly likely that the ratings will be downgraded. The agencies responded in a similar fashion when Fortum, a Finnish utility, surprised the market by announcing its bid to acquire Germany’s Uniper for EUR9.8 billion. Both acquisitions are in line with the recent trend of mainly non-financial companies being prepared to allow their creditworthiness to deteriorate in order to achieve in-organic growth.

In September, the supply of new bonds was EUR51.7 billion, more than twice the amount of the previous month and about 8% up on September 2016. Non-financial sector institutions issued EUR24.2 billion in new bonds last month, while financial sector institutions issued EUR27.5 billion in new bonds. During the first nine months of this year, the supply of new bonds amounted to EUR418.2 billion, a slight decrease of 4% compared to last year.

Portfolio developments per 2017-09-30

Across the month, the portfolio’s sensitivity to market trends varied between 107% and 113%. The portfolio, therefore, held a relatively slight overweight positioning in terms of market risk.

Our positioning in the telecom, utility and banking sectors performed relatively well in September. In contrast, our positioning in the auto and construction materials sectors, as well as in non-banking financial service providers, contributed negatively. Our liquidity position (in the shape of cash and government bonds) contributed negatively.

The pair trades contributed negatively, in particular the long position in Unibail-Rodamco versus the short position in Wendell and the long position in Heineken versus the short position in Valeo. The long position in Nestlé versus the short position in Statoil contributed positively. The positive basis trade in Simon Property Group also contributed positively. At the end of the month the global exposure of the Fund was 120%.

At individual company level, the overweights in Telecom Italia, AT&T, Engie, Total and Anglo American contributed positively. In contrast, the underweights in Daimler and Bayer and overweight in Hannover Re made a negative contribution.

In September, the Fund participated in new bond issues by, among others, Transurban, Belfius, Engie, Brenntag, Goodman Australia, Volksbank, Commonwealth Bank of Australia (subordinated), Deere, Total and CPI Property Group.

Outlook
In spite of the fact that we hold a more positive view of the technical climate than we did a month ago, we continue to be reasonably cautious about the European credit market. The lack of dispersion in the spread premiums that companies with wide-ranging levels of creditworthiness are having to pay remains a serious cause for concern. Moreover, from a historical perspective spreads are still very tight. We also see risks in the current conflict between the US and North Korea and in inflation rising more rapidly than expected due to the upturn in the global economy. For this reason, in spite of the robust economic climate in Europe and the persisting support for the credit market deriving from the ECB’s CSPP, we intend to maintain our 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 2017-09-30 (rebased)

No chart data available

Performance per 2017-09-30

Slide to see more
  Fund
1 month 0.2 %
3 months 0.2 %
This year 1.4 %
2014 2.3 %
2015 -0.5 %
2016 1.8 %
3 years (on annual basis) i 1.0 %
Since inception (on annual basis) i 1.4 %
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 (2017-09-30)

Fund
Benchmark
21.6 %
0-3 year
21.8 %
13.9 %
3-5 year
28.0 %
31.6 %
5-7 year
20.6 %
13.3 %
7-10 year
21.3 %
16.3 %
> 10 year
8.4 %
3.2 %
Cash
0.0 %
Totaal
100 %
100 %

Sector allocation (2017-09-30)

29.8 %
Banks
16.2 %
Consumer Goods & Services
8.2 %
Utilities
7.7 %
Telecom & Technology
7.7 %
Financial Services & Real estate
7.7 %
Industry
5.0 %
Insurance
4.4 %
Other
3.0 %
Energy
2.7 %
Health Care
2.7 %
Sovereign bonds
2.4 %
Basic Materials
1.6 %
Asset Backed Securities
0.9 %
Supranational
Totaal
100 %
The cash position is included in ‘Other’.

Rating allocation (2017-09-30)

Fund
Benchmark
7.7 %
AAA
0.6 %
4.8 %
AA
11.0 %
34.7 %
A
39.2 %
39.9 %
BBB
49.3 %
4.7 %
BB
0.0 %
4.9 %
Not Rated
0.0 %
3.2 %
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 (2017-09-30)

2.2 %
2.500% Duitsland 2010-21
1.4 %
0.375% KFW 2016-23
1.0 %
1.379% Bank of America 2017-25
0.9 %
1.375% Goldman Sachs 2017-24
0.9 %
1.000% Credit Suisse 2016-23
0.9 %
1.125% Volkswagen Leasing 2017-24
0.9 %
4.000% Intesa SanPaolo 2010-18
0.9 %
0.875% ENGIE 2017-24
0.9 %
1.638% JP Morgan Chase 2017-28
0.9 %
0.850% US Bancorp 2017-24
Totaal
11.0 %
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
May be offered to professional investors only in
Belgium, France, Germany, Italy, Luxembourg, Sweden, 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.