Kempen (Lux) Euro High Yield Fund Class BN


Kempen International Funds SICAV – Kempen (Lux) Euro High Yield Fund (the Fund) invests primarily in credits that do not have an investment grade rating (lower than BBB-) and are denominated in Euros. The Fund may deviate from the benchmark, the BofA Merrill Lynch Composite Index, which only includes financial instruments with a minimal rating of BB- (known as ‘High Yield’).

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 while investment risks are continuously monitored. Investments are selected on the basis of an extensive analysis of the terms and conditions of the bond issues. This shareclass of the Fund is not active yet, therefore historical performances are not available yet. The historical returns of the I class offer a reasonable insight into the historical returns of the Fund. Please not that the I class is 0.04% cheaper on an annual basis than the BN class and therefore the returns are slightly higher than the returns of the BN class.

Management team

Alain van der Heijden, Joost de Graaf, Bart aan den Toorn, Harold van Acht, Lizelle du Plessis, Kim Lubbers, Tetiana Kharlamova, Arif Bagasrawalla

Performance per 2021-05-31 (rebased)

No chart data available

Performance per 2021-05-31

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This year 0.0 %
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

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Total fund size
EUR 298.04 M 2021-08-31
Share class size
EUR 0.00 M
Turnover rate
448.28 %
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 2021-08-31

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  Fund Benchmark
Number of holdings 163 722
Weighted rating BB+ BB+

Developments per 2021-08-31

In August, the spread on the ICE BofA High Yield Composite Index (Q964) tightened by 3 basis points to a level of 168 basis points over the swap curve. The index earned an absolute return of 0.2%. German 10-year government bond yields closed August at -0.385%, representing an increase of 8 basis points compared to the end of July.

Liquidity and volumes were at low levels during August, typical for the summer months. Compressed markets had led to increased demand for higher beta names in recent months; this search was on hold in August.

Economic data remained strong in Europe and to a lesser extent in the US, with Euro Area Composite PMI remaining near the 15 year high at 59.5 and the US PMI declining from 59.5 to a still respectable 55.4. In China, the impact of the zero tolerance policy towards COVID was clearly visible in the services PMI for August published at the start of September. The index dropped almost 6 points towards 47.5, the first time below the neutral 50 reading since February 2020. Also the manufacturing PMI at 50.1 declined a bit further caused by several factors, including the two week closure of one of China’s largest ports and the semi-conductor shortage in the automotive industry.

Inflation also remains a concerns for the market, with the latest US CPI reading of 5.4% and core CPI at 4.3%, both staying close to recent highs. Europe’s flash CPI print for August saw the year-on-year increase at 3%, compared to an expected 2.7% and a July reading of 2.2%.

The bull run in European bond yields came to an end in August, with spreads on bunds, OATs and BTPs widening by 8, 7 and 9 basis points, respectively. Although the FED and ECB remain sanguine about the longer term inflation risk, calling the currently high inflation rates transitory and caused by temporary factors, they did signal either the intention to start to taper in the not too distant future (FED) or the need to start a discussion on this topic (ECB). It is very clear that both major central banks do not want to upset markets by taking drastic steps. Accordingly, any form of policy normalization will be very gradual as long as the data allow for this.

Similar to Europe, yields on 10 year US Treasuries increased by 9 basis points to 1.31%, on the back of the official confirmation of the policy change during the Jackson Hole conference. The Fed is maintaining its mantra that prices are “largely reflecting transitory factors” but also acknowledges that the current strong economic environment no longer warrants a similar level of quantitative support .

Further US fiscal stimulus has stalled for now after the Senate voted in favor of the so called infrastructure bill. The $3.5 trillion budget reconciliation bill remains a work in progress as not all Democratic senators are on board yet.

Concerns about the delta variant’s spread receded during the month as the number of new cases plateaued at the global level and even showed signs of declining by the end of the month.

In credit, primary markets were effectively closed during the first three weeks of August. This however changed in the last week which turned out to be quite active. This was a bit earlier than normal and it seemed that certain companies wanted to raise capital before the Jackson Hole conference for the off chance that this event would have resulted in clearly higher rates.

Supply of high yield bonds in August amounted to €1.3 billion in European currencies and €1.6 billion in Yankees (ex-financials, including FRNs). Fixed coupon issuance in European currencies amounted to €1.1 billion. So supply was low in August and the “Jackson Hole” effect wasn’t visible in high yield.

In August, Real Estate, Infrastructure and Capital Goods were the outperforming sectors. The bottom performers were Telecommunications, Food & Beverage and media. CCC rated corporates continue to outperform BBs and Bs. Bs also outperformed BBs but the difference was small. Corporate hybrids and subordinated financials underperformed High Yield.

The portfolio delivered a return of +0.24% (gross). This was 4 basis points above the benchmark return of +0.20%. During the month, the portfolio’s sensitivity to market trends varied between 99% and 103%. The portfolio therefore held an overweight positioning in terms of market risk. Our positioning in Automobiles & Parts, Insurance and Construction & Materials performed relatively well in August. Our positioning in Infrastructure, Basic Resources and Food & Beverage had a negative impact on performance. At individual company level, positive contributions came from our overweight in Schaeffler and Adler that performed relatively well and our underweight in ZF Friedrichshafen. Negative contributions came from our underweight in Renault and Corestate and overweight in Ford.

In August, the Fund participated in a new deal from Castellum. We continue to take a conservative approach towards participating in new issues as new issue premiums are limited and all in valuations are stretched.

We remain fairly constructive on the market. US and European economic data remains strong but growth rates are slowing. Companies’ Q2 2021 results released to date are supportive, with many companies revising guidance upwards. However we are currently seeing increasing signs of shareholder friendly behaviour, with more companies increasing dividends, launching substantial share buyback programmes or showing appetite for M&A. With spreads at all time lows, valuations are looking really expensive. The technical backdrop continues to remain supportive for now with the ECB continuing to actively buy corporate bonds and being very clear that actual tapering is some time off and will be done in a very gradual manner.

Performance per 2021-05-31 (rebased)

No chart data available

Performance per 2021-05-31

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This year 0.0 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.


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Maturity profile (2021-08-31)

31.4 %
3-5 year
35.4 %
22.7 %
5-7 year
22.9 %
20.2 %
0-3 year
22.1 %
12.5 %
7-10 year
14.3 %
10.3 %
> 10 year
5.3 %
2.9 %
0.0 %
100 %
100 %

Sector allocation (2021-08-31)

32.7 %
Consumer Goods & Services
21.4 %
10.4 %
Telecom & Technology
6.7 %
6.0 %
Basic Materials
5.8 %
Financial Services & Real estate
4.3 %
3.9 %
Health Care
3.4 %
3.1 %
2.2 %
100 %

Rating allocation (2021-08-31)

1.2 %
11.5 %
80.7 %
2.9 %
0.7 %
Not Rated
2.9 %
100 %

Top 10 holdings (2021-08-31)

4.0 %
3.021% Ford Motor 2019-24
3.8 %
3.625% Netflix 2017-27
2.2 %
3.375% Crown Euro 2015-25
2.1 %
0.875% Ball Corp 2019-24
1.9 %
1.000% Arcelormittal 2019-23
1.7 %
2.125% Volvo 2019-24
1.5 %
1.875% Adler 2021-26
1.5 %
2.000% ZF Europe 2019-26
1.5 %
3.750% Faurecia 2020-28
1.4 %
2.625% RCI Banque 2019-30
21.5 %



An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.520 %
Service fee i
0.10 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i

Share class details

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Share class
BN i
Investor type
Institutional & Private
Benchmark i
BofA Merrill Lynch Composite Index
Reference index i
BofA Merrill Lynch BB-B High Yield Constrained Index
Duration hedged
Investment category
Credits denominated in euro
UCITS status i
Open-end i
Base currency
Share class currency
Management company
Kempen Capital Management N.V.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.


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Minimum subscription
Initial Subscription: € 1
Subscription/Redemption Frequency

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.


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.


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.


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]


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


[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.


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.


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.


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


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.


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.


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


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


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.


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.


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.


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.


[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


For more information about the mid and long term risks associated with the investments:



* 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
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