Kempen Lux Euro High Yield Fund Class LR

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.

Management team

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

Performance per 2018-03-31 (rebased)

No chart data available

Performance per 2018-03-31

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  Fund Benchmark
1 month -0.3 % -0.3 %
3 months -0.9 % -0.9 %
This year -0.9 % -0.9 %
2017 2.3 % 1.6 %
Since inception (on annual basis) i 1.4 % 0.7 %
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 31.45 M 2018-03-31
Net Asset Value i
EUR 25.43 2018-04-19

Fund characteristics per 2018-03-31

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  Fund Benchmark
Number of holdings 122 546
Duration i 4.4 4.4
Yield to maturity 2.7 % 2.4 %
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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Market developments per 2018-03-31

In March, the spread on the ML Q964 Index widened by 24 basis points to 175 basis points above the swap curve. The index earned an absolute return of -0.33%. German 10-year government bond yields closed March at 0.49%, a drop of 16 basis points compared to the end of February.

The decrease in German 10-year government bond yields seems primarily to be driven by three developments. Firstly, equity markets declined after two major tech companies came under public pressure. President Trump has commented several times on what he sees as the undesirability of the commercial relationship between Amazon and the US postal service. At the same time, Facebook was embarrassed by a major data leak and suspected involvement in Russian interference in the 2016 US presidential election campaign. Tech companies - mainly those collectively known as FAANG equities, i.e. Facebook, Amazon, Apple, Netflix and Alphabet (Google) - were responsible for a significant portion of the gains in equity markets at the start of this year. The drop in their equity prices in March consequently had a negative impact on investor sentiment.

The second event that contributed to the fall in German bond yields was the publication of several economic indicators pointing to a slowdown in European growth. In spite of the fact that the PMIs for the industrial and service sectors remain well above 50 – and in doing so point to growth – indicators are slowly trending towards lower levels. Weaker economic growth in Europe would decrease the potential for a sharp rise in inflation and reduce the risk of a corresponding acceleration in monetary tightening by the ECB.

The third event that contributed to a more risk-averse attitude among investors was political uncertainty, mainly driven by staffing changes within the Trump administration. Gary Cohn, a former president and COO of Goldman Sachs, resigned as chief economic advisor to make way for television presenter Larry Kudlow. Next, Secretary of State Rex Tillerson was fired and John Bolton – a known supporter of military interventions – was appointed National Security Advisor. Combined with signs that President Trump wants to impose import tariffs in order to reduce the US trade deficit, these staffing changes again triggered concerns about the administration’s foreign policy.

In addition to general risk aversion among investors, outflow from the high yield bonds asset class was an important factor behind the widening of spreads in March.

As of the end of March, 15 new bonds are to be included in the ML Q964 benchmark, primarily the result of new bond issues. These include a EUR2 billion lower tier 2 bond issued by French insurer AXA, a EUR1.25 billion corporate hybrid bond issued by Spanish telecom concern Telefonica, a EUR650 million bond issued by French auto manufacturer Peugeot and a EUR750 million lower tier 2 bond issued by ING Group.

New European high yield bond issues by non-financial institutions amounted to EUR6.7 billion in March, down by about 28% on last year. In the first three months of this year, EUR20.5 billion in European high yield bonds were issued by non-financial institutions, a drop of 8% compared to the same period last year. BB bonds accounted for 51% of new bond issues in the first quarter, the lowest portion for this quarter since 2013.

Portfolio developments per 2018-03-31

During the month, the portfolio’s sensitivity to market trends varied between 103% and 107%. The portfolio therefore held an overweight positioning in terms of market risk.

Our positioning in the media, insurance and retail sectors performed relatively well in March. In contrast, our positioning in the auto, telecom and banking sectors contributed negatively to the return. Our liquidity position made a positive contribution.

At individual company level, there were positive contributions from the overweights in Darling Ingredients, INEOS and Huntsman, as well as the underweights in Salini Impreglio, AXA and a number of Liberty Global entities, including Telenet and UPC. Our overweights in Schaeffler (holdco), Telecom Italia and Elis contributed negatively to performance.

In March, the Fund participated in new bond issues by e.g. IMCD, Akelius (corporate hybrid), Stora Enso and Allied Irish Banks Group.

Outlook
We will maintain our conservative positioning in spite of the significant widening of spreads in March. In the run-up to the publication of corporate results over the first quarter of 2018, we anticipate an above-average supply of new bonds, mainly issued by non-financial institutions. Taking into account the trend towards outflow from the high yield bond asset class, we expect this supply of new bonds to prompt a further widening of spreads.
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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2018-03-31 (rebased)

No chart data available

Performance per 2018-03-31

Slide to see more
  Fund Benchmark
1 month -0.3 % -0.3 %
3 months -0.9 % -0.9 %
This year -0.9 % -0.9 %
2017 2.3 % 1.6 %
Since inception (on annual basis) i 1.4 % 0.7 %
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 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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Maturity profile (2018-03-31)

Fund
Benchmark
28.7 %
5-7 years
0.0 %
20.6 %
7-10 years
0.0 %
19.8 %
3-5 years
0.0 %
16.5 %
> 10 years
0.0 %
10.3 %
0-3 years
0.0 %
4.2 %
Cash
0.0 %
0.0 %
0-3 year
19.4 %
0.0 %
3-5 year
25.2 %
0.0 %
5-7 year
32.6 %
0.0 %
7-10 year
17.1 %
0.0 %
> 10 year
5.7 %
Totaal
100 %
100 %

Sector allocation (2018-03-31)

25.4 %
Consumer Goods & Services
18.0 %
Industry
10.4 %
Basic Materials
10.3 %
Banks
10.0 %
Telecom & Technology
4.8 %
Insurance
4.7 %
Utilities
4.4 %
Health Care
4.2 %
Other
4.1 %
Financial Services & Real estate
3.7 %
Energy
Totaal
100 %

Rating allocation (2018-03-31)

67.7 %
BB
20.5 %
BBB
4.9 %
A
4.2 %
Cash
1.3 %
B
1.3 %
Not Rated
Totaal
100 %

Top 10 holdings (2018-03-31)

2.1 %
3.125% Softbank Group 2017-25
2.0 %
3.750% IHO Verwaltungs 2016-26
2.0 %
3.125% Wind TRE 2017-25
1.8 %
6.250% Unitymedia Hessen 2013-29
1.7 %
1.500% Leonardo 2017-24
1.6 %
4.750% Fiat Chrysler Finance 2014-21
1.5 %
4.750% Darling Global 2015-22
1.4 %
3.250% Quintiles 2017-25
1.4 %
3.625% Telecom Italia 2016-24
1.4 %
5.375% Electricite de France 2013-25
Totaal
16.9 %
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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Ongoing charges

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Management fee i
0.32 %
Service fee i
0.10 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
0.47 %

Other costs

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Upward swing factor i
0.30 %
Downward swing factor i
0.30 %
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 1%. As of 22 September 2017 the swing factor has been adjusted from 0.40% to 0.30%.
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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
LR
Investor type
Private
Distributing
No
Benchmark i
BofA Merrill Lynch Composite 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
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.

Tradability

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Minimum subscription
Initial subscription: €1,000, additional subscriptions: €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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

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 that we invest in.

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 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.