Kempen Lux Euro High Yield Fund Class AN

Profile

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. Attention: it is envisaged that this share class will be closed for further subscriptions once the Fund (all share classes combined) reaches a size of € 150 million. The discounted management fee of 32bps will remain for a period of 3 years starting at the launch of the share class, to facilitate the initial growth of the Fund. After this period the Board of Directors will decide on the conditions and future of this share class.

On September 1, 2020 this share class was renamed from LR to AN and the management fee has increased to 0,52%.

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 2022-03-31 (rebased)

No chart data available

Performance per 2022-03-31

Slide to see more
  Fund Benchmark
1 month 0.0 % -0.1 %
3 months -4.3 % -4.4 %
This year -4.3 % -4.4 %
2019 11.0 % 10.1 %
2020 4.0 % 1.9 %
2021 1.4 % 2.1 %
1 year (on annual basis) -3.8 % -3.4 %
3 years (on annual basis) i 2.2 % 1.5 %
Since inception (on annual basis) i 2.4 % 1.7 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. On September 1st 2020, the management fee of this share class was increased from 0.32% to 0.52%. Performance data until this date are based on the lower management fee.
More information can be found on the documents page of this fund

Key figures

Slide to see more
Total fund size
EUR 205.54 M 2022-03-31
Share class size
EUR 7.50 M 2022-03-31
Net Asset Value i
EUR 26.59 2022-05-13
Morningstar rating â„¢
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 2022-03-31

Slide to see more
  Fund Benchmark
Number of holdings 167 736
Duration i 3.9 4.1
Yield to maturity 3.2 %
Weighted rating BB+ BB+
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

Developments per 2022-03-31

In March, the spread on the ICE BofA High Yield Composite Index (Q964) tightened by 40 basis points to around 235 basis points over the swap curve. This is equivalent to 280 basis points over the government bond curve. The index earned a total return of -0.07%. German 10-year government bond yields closed March at +0.55%, representing an increase of 41 basis points compared to the end of February 2022.

March market headlines were dominated by the war, inflation data and central bank commentary. During the first two weeks of March spreads were volatile and saw wild swings but didn’t really improve. Markets started to rally thereafter and credit spreads tightened significantly. The rally was fed by the hope that the war wouldn’t see a further escalation and that negotiations might even result in a (temporary) truce in the not too distant future. Furthermore, new issue activity was non-existent during the first weeks of March which was supportive for technicals. The more optimistic sentiment also caused government bonds to slowly lose their safe haven bid. The sell-off here intensified after every inflation number published. Eventually the 10 year German government bond yield topped the 0.5% level, a number last seen in October 2018.

The war obviously has an impact on energy and commodity prices and with that on inflation. Inflation was however already high before the war started and the inflationary pressures were quite broad based especially in the US. In fact, US CPI was already at 7.5% YoY in January and increased further to 7.9% in February. This was the highest reading since January 1982. Ex food and energy inflation increased from 6% to 6.4%, the highest reading since August 1982. In the Eurozone, inflation is less broad based than in the US but clearly on the rise as well. Headline CPI increased from 5.1% in January to 5.8% in February and the preliminary figure for March show a further increase towards 7.5%. Core CPI is also increasing but at a more gradual pace and the gap between the two is much wider than in the US. Core YoY CPI was 2.3% in January, 2.7% in February and the preliminary figure for March shows a 3% increase.

The US labour market remains very strong with a further drop in the unemployment rate to 3.8%. High inflation rates combined with a tight labor market result in higher wage demands from workers. YoY average hourly wages increased by 5.1% in February. This is still clearly below the inflation rate although above estimated productivity growth. This will probably further fuel inflationary pressures, with inflation expected to stay high. In our opinion, inflation will only decline with forceful monetary tightening by the Fed. The FED governors in several speeches and testimonies were very clear in their willingness to do so. Markets are now pricing in over 250 bps in rate hikes before the end of the year. The market also seems to price in that the FED will be successful in cooling inflation as long rates didn’t increase as much as short rates. At the end of the month, the famous 2 – 10 year spread even inverted. This normally indicates a recession is likely to happen in the not too distant future. However, given that real rates are still firmly in negative territory the signaling function is probably less potent than what is normally the case. For now, GDP growth remains high, forward economic indicators remain firmly in positive territory and consumer confidence is staying close to recent highs.

The Eurozone economy is clearly more impacted by the war which is leading to a further increase in energy and commodity prices. Although PMIs remain firmly at expansionary levels and the unemployment rate dropped to a historic low since the birth of the eurozone, consumer confidence did show a large drop in most eurozone countries. Also most economists expect GDP growth to slow to the 2% area from an earlier expectation of 3 to 3.5% for the eurozone. In this light, market participants expected relatively dovish sounds from the ECB with less focus on inflation fighting and more eye for the impact of the war on economic growth. This however proved not to be the case. Lagarde was quite clear that inflation is now the number one goal. The market got the hint and is pricing in around 0% short term rates at the end of 2022.

The portfolio outperformed in the early part of the month and held on these gains when the market started to rally in the second half of the month. The market offered a number of attractive relative value opportunities that we exploited and which caused beta to drift upwards a bit. We also decided to let the beta drift upwards due to the relative strength of the market. With hindsight this was the correct course of action to take as spreads subsequently rallied quite hard.

At this point we are getting more cautious again as spreads are not that attractive anymore and our market model remains clearly in negative territory.

Primary markets remained almost completely silent in High Yield during March. This is contrast to the investment grade market that saw quite normal activity levels. March saw €1.7 billion of issuance in European currencies and €0.5 billion issuance in Yankees (ex-financials, including FRNs). Fixed coupon issuance in European currencies was €1.6 billion. A normal level of activity in March is around the 9 – 10 billion level.

In the broader High Yield universe, it was not that surprising to see that single B rated bonds outperformed BB rated bonds during the month. In general single B rated bonds are less sensitive to increasing interest rates as they overall are shorter duration. Furthermore, they are higher beta in nature so the spread rally helped them more than the BB category.

The demand for HY credit was weak in February and this trend continued in the first weeks of March. The rally that started in the middle of March drew in more capital however and at the end of the month the asset class was again seeing some inflow. For the month as a whole the net flow was still firmly negative however.

In March, Automobiles & Parts, Telecommunications and Travel & Leisure were the underperforming sectors in the benchmark. Oil & Gas and Healthcare were the best performing sectors.

The portfolio delivered a return of +0.08% (gross). This was 15 basis points above the benchmark return of -0.07%. During the month, the portfolio’s sensitivity to market trends varied between 94% and 98%. The portfolio therefore held a moderate underweight positioning in terms of market risk in combination with a relatively high cash balance and covered bonds.

Our positioning in Automobiles & Parts, Cash, Hybrids and Travel & Leisure contributed positively while our positioning in Banks, Construction & Materials and Basic Materials subtracted slightly. On an individual issuer level the strategy saw a negative contribution from our overweight in Crown Holdings and OP Bank while our underweight in Eircom also contributed negatively. Our overweights in Seche Environment, IGT, LKQ and Nexi had a positive impact on performance.

In March, the Fund participated in new deals from Volkswagen (perpetual) and Cellnex. On the financials side, we participated in Banco do Sabadell and Deutsche Bank. We continue to take a conservative approach towards participating in new issues as new issue premiums (NIP) vary and we have a moderately negative view on the market.

Outlook
At the beginning of February we changed our neutral to slightly bearish view on the market and we became moderately bearish. Despite still strong US and European economic data, it is clear that growth rates are slowing. Although companies’ 2021 results are in general strong, we do see more aggressive shareholder friendly behaviour, with more companies increasing dividends, launching substantial share buyback programmes or engaging in M&A. With spreads again near all-time lows, valuations are considered expensive. On top of that we are now faced with a brutal war in the Ukraine. The technical backdrop continues to be supportive for now with the ECB continuing to actively buy corporate bonds. It is uncertain when this will change. For 2022, we expect spreads between rating categories to decompress. We are underweight the BB- segment as a result. Lastly we are also underweight the long end of the credit curve due to the expected impact of rising rates on longer dated maturities. This is also expressed via a market value underweight in callable bonds.

Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

Performance per 2022-03-31 (rebased)

No chart data available

Performance per 2022-03-31

Slide to see more
  Fund Benchmark
1 month 0.0 % -0.1 %
3 months -4.3 % -4.4 %
This year -4.3 % -4.4 %
2019 11.0 % 10.1 %
2020 4.0 % 1.9 %
2021 1.4 % 2.1 %
1 year (on annual basis) -3.8 % -3.4 %
3 years (on annual basis) i 2.2 % 1.5 %
Since inception (on annual basis) i 2.4 % 1.7 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. On September 1st 2020, the management fee of this share class was increased from 0.32% to 0.52%. Performance data until this date are based on the lower management fee.

Dividends

Slide to see more
Distributing
No
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

Maturity profile (2022-03-31)

Fund
Benchmark
29.9 %
3-5 year
35.8 %
25.6 %
0-3 year
26.5 %
24.9 %
5-7 year
22.7 %
10.1 %
> 10 year
6.2 %
8.5 %
7-10 year
8.8 %
1.0 %
Cash
0.0 %
Total
100 %
100 %

Sector allocation (2022-03-31)

29.5 %
Consumer Goods & Services
23.9 %
Industry
11.8 %
Telecom & Technology
9.7 %
Banks
6.1 %
Insurance
4.5 %
Basic Materials
3.4 %
Other
3.2 %
Health Care
3.1 %
Utilities
2.7 %
Financial Services & Real estate
2.1 %
Energy
Total
100 %

Rating allocation (2022-03-31)

0.6 %
AAA
2.5 %
A
16.8 %
BBB
75.6 %
BB
3.0 %
B
0.4 %
Not Rated
1.0 %
Cash
Total
100 %

Top 10 holdings (2022-03-31)

3.9 %
3.021% Ford Motor 2019-24
2.0 %
2.000% Kraft Heinz Foods 2015-23
1.9 %
2.750% Faurecia 2021-27
1.8 %
1.250% Cellnex Finance 2021-29
1.6 %
3.875% LKQ Italia Bondco 2016-24
1.5 %
2.750% Intl Consolidated Airlin 2021-25
1.5 %
1.875% Autostrade per Italia 2015-25
1.5 %
1.000% Cellnex Finance 2021-27
1.4 %
2.750% ZF Finance 2020-27
1.4 %
2.000% Nokia 2019-26
Total
18.6 %
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

Environmental and/or social characteristics promoted

The Kempen Euro Credit Fund, Kempen Euro Credit Fund Plus and Kempen Euro High Yield Fund (the “Funds”) fall under the scope of article 8 of the SFDR which means that the Funds promote environmental and/or social characteristics. This Funds will invest in a broad range of companies, of which some will have sustainability objectives.

The Fund commits to the goals of the Paris Agreement. This encompasses short-term objectives (2025), a mid-term ambition (2030) and a long-term commitment to be a net zero investor by 2050. By 2025, we aim to be aligned with a path to achieving the Paris Agreement and Dutch Klimaatakkoord. We follow the market reduction, which assumes a pathway in line with the EU Benchmarks.

Fund carbon emission targets

ESG Investment process

The promotion of environmental and/or social characteristics is achieved through the consistent implementation of the Funds ESG policy. The ESG policy is fully implemented in our strategy’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership.

In the investment process we assess the ESG profile of a company. We look at each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, practices and disclosure. This includes an assessment of good governance practices. The investee companies are rated for governance aspects using external research as well as making internal assessments. Furthermore, we look into the company’s exposure to past controversies and future ESG opportunities. Based on the fundamental ESG analysis we form an opinion on the quality of a company’s ESG profile.

Exclusion

The Fund applies exclusion criteria. These take into account international standards, such as UN Global Compact Framework, the OECD Guidelines for Multinational Enterprises, UN Guiding Principles for Business and Human Rights, and our Principles for Responsible Investment commitments. The Funds apply additional exclusion criteria based on product involvement and business conduct.

Key figures

  Kempen criteria Additional criteria
Business conduct
Human Rights
Labour
Environment
Anti Corruption
Product involvement
Controversial Weapons
Tobacco
Thermal Coal
Tar Sands
Adult Entertainment
Alcohol
Animal Welfare & GMO
Gambling
Power Generation Nuclear
Power Generation Carbon Intensive
(Un)conventional Oil & Gas Extraction
Weaponry
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

Slide to see more
Management fee i
0.520 %
Service fee i
0.10 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
0.67 %
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.

Share class details

Slide to see more
Share class
AN i
Investor type
Private
Distributing
No
Benchmark i
BofA Merrill Lynch Composite Index
Reference index i
BofA Merrill Lynch BB-B High Yield Constrained Index
Duration hedged
No
Investment category
Credits
Universum
Credits denominated in euro
Inception date
2017-07-31
Domicile
Luxembourg
May be offered to all investors in
Belgium, Luxembourg, 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
BNP Paribas Securities Services S.C.A., Luxembourg branch
Morningstar rating â„¢

Tradability

Slide to see more
Minimum subscription
Initial subscription: €1
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU1626446964
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.
Kempen (Lux) Euro High Yield Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM). 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 of the Fund are available at the registered office of the Fund located at 60, avenue J.F. Kennedy, L-1855, Luxembourg 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.