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 2022-08-31 (rebased)

No chart data available

Performance per 2022-08-31

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  Fund Benchmark
1 month -2.0 % -2.0 %
3 months -2.8 % -3.1 %
This year -10.5 % -10.9 %
2019 11.0 % 10.1 %
2020 4.0 % 1.9 %
2021 1.4 % 2.1 %
1 year (on annual basis) -11.5 % -11.6 %
3 years (on annual basis) i -1.6 % -2.3 %
5 years (on annual basis) i 0.8 % 0.1 %
Since inception (on annual basis) i 0.9 % 0.1 %
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

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Total fund size
EUR 180.89 M 2022-08-31
Share class size
EUR 7.14 M 2022-08-31
Net Asset Value i
EUR 25.46 2022-09-23
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 2022-08-31

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  Fund Benchmark
Number of holdings 175 756
Duration i 3.7 3.7
Yield to maturity 5.3 %
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 2022-08-31

In August, the spread of the ICE BofA High Yield Composite Index (Q964) contracted by 26 basis points to a level of 340 basis points over the swap curve. This is equivalent to approximately 412 basis points over the government bond curve. The index earned a total return of -2.02%. German 10-year government bond yields closed August at +1.54%, representing an increase of 72 basis points compared to the end of July 2022.

Credit markets carried over July’s strength in the first weeks of August. Inflows in the asset class combined with a dearth of new supply put downward pressure on spreads; they bottomed out around 311 bps mid-August. At that point an interesting divergence emerged between Investment Grade (IG) and High Yield (HY) credit. In IG new issue activity restarted. To get bonds placed, new issue premiums needed to be attractive and several times topped 20 bps. This again repriced secondary curves wider and pushed up overall spread levels. In contrast, HY saw another month with basically no new supply. The callability feature of many HY bonds plays into hands of issuers. Almost all bonds trade to maturity given their relatively low coupons in today’s high interest rate environment. This will probably keep supply relatively limited for the coming 12 to 18 months. No new issue activity in HY kept existing bonds relatively well bid and spreads only started to widen at the end of the month when the sell-off in IG accelerated

The summer market rally eased financial conditions while central banks need these to remain tight to cool the economy. In contrast, inflation figures remained far too high although the first signs of stabilisation were recorded on the back of lower commodity prices. Central bankers around the world stepped up their anti-inflation rhetoric to keep financial conditions tight. This also affected risk sentiment. Government bond rates bottomed out earlier in August than credit spreads and then started to gradually increase. The 10 year German government increased by 72 basis points, French OATs by 77 bps and Italian BTPs by 87 bps.

Most of the economic data published last month, such as the global composite Purchasing Managers’ Index (PMI), which dropped to a 22-month low of 50.8 in July, continued to illustrate the slowing of the global economy. However, the economic data was generally a bit better than expected, as shown by economic surprise indices. All in all, the level of uncertainty about the outlook for the global economy remains elevated. This uncertainty is especially elevated in Europe, where after six months of war in Ukraine there is no sign of a ceasefire, and where a recession seems increasingly likely this winter as the region’s energy crisis continues to intensify. While the resumption of Ukraine’s grain exports through the port of Odessa has eased global food price pressures somewhat, Russia has continued at the same time to limit its gas exports to Europe, which together with the announcement of an unscheduled maintenance shutdown of the Nord Stream 1 pipeline, pushed average gas prices over the month to new all-time highs.

In the US, even though the economy has already recorded two consecutive quarters of negative economic growth this year, some economic data published in August was quite positive. US employment data was surprisingly strong, with the non-farm payrolls print showing that 528k jobs were created in July compared to market expectations of only 250k. The details of the report were also positive as it showed that hiring had picked up significantly across sectors while the unemployment rate fell, and wages rose. At the same time, inflation seems to have passed its peak as CPI increased 8.5% year on year in July, down from 9.1% in June. However, core inflation is still above the Federal Reserve’s (the Fed’s) target. The Fed remains committed to curbing inflation, as evidenced by the rather hawkish speech that Jerome Powell gave at Jackson Hole at the end of the month.

Eurozone second-quarter GDP surprised on the upside, growing 0.7% QoQ, but the data revealed important divergences among member states. Those countries benefiting from the post-Covid services rebound, such as Spain, Italy and, to a lesser extent, France, generally performed well while the German economy, which is the most dependent on Russian gas imports, came to a standstill. Still, recession risks remain elevated, as shown by the weakness of the euro, which dropped to parity with the US dollar, and by the Flash Eurozone composite PMI, which dropped further into contraction territory at 49.2 in August.

We continue to run an underweight risk position from a beta perspective. During the month we slightly increased our beta positioning by investing cash in relatively wide trading, short maturity bonds. Wider spreads and increasing dispersion continue to present interesting relative value opportunities.

As discussed above, issuance of ‘pure’ HY bonds was zero in August. We did see a number of subordinated financial bonds being printed that in general came at attractive levels. The new Commerzbank lower tier 2 with a 6.5% coupon is a case in point. Only eleven months ago Commerzbank issued a similar instrument with a 1.375% coupon! In contrast to IG, HY continued to see small outflows in August.

The portfolio delivered a return of -1.91% (gross). This was 11 basis points above the benchmark return of -2.02%. During the month, the portfolio’s sensitivity to market trends varied between 94% and 97% in beta terms. Our conservative positioning as a result paid off in relative terms. Our small overweight in hybrids had a largely neutral impact on relative performance. Almost all of the outperformance came from strong bond and issuer selection within seniors. At a sector level, our positioning in automobile & parts, industrial goods & services and capital goods contributed positively while utilities and real estate contributed negatively. On an individual issuer level the strategy saw a positive contribution from our overweights in Orano and Dometic and our positioning in ZFF and our underweight in Faurecia. Our overweight in NN Group and in Aroundtown hybrids had a negative impact on performance.

In August, the Fund participated in new subordinated bonds from ING Group, NN Group, Commerzbank, Banco Sabadell and Allianz amongst others.

Outlook
Although credit spreads have widened a bit again, we remain on the cautious side. We see more risks on the horizon, including a prolonged Russian invasion, uncertainty regarding European energy supply and security, weaker global growth and stubbornly high inflation. We are still moderately bearish an think spreads could widen due to the weaker macro-economic environment, expectations for aggressive hiking by central banks and impact over time of Quantitative Tightening globally. Q2 2022 company results were solid but we fear that higher rates and a potential recession in both Europe and the US over the next 18 months are not adequately reflected in earnings and profit guidance at present. Spreads are too low to fully compensate for the risks that we have identified. The technical backdrop is not supportive with supply that needs to pay substantial NIPs to be able to print. For 2022, we expect spreads between rating categories to decompress. We are underweight the BB- segment as a result and have compensated this partly with an overweight position in IG rated subordinated paper. Lastly we are also underweight the longer end of the credit curve due to the expected impact of rising rates on longer dated maturities.

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 2022-08-31 (rebased)

No chart data available

Performance per 2022-08-31

Slide to see more
  Fund Benchmark
1 month -2.0 % -2.0 %
3 months -2.8 % -3.1 %
This year -10.5 % -10.9 %
2019 11.0 % 10.1 %
2020 4.0 % 1.9 %
2021 1.4 % 2.1 %
1 year (on annual basis) -11.5 % -11.6 %
3 years (on annual basis) i -1.6 % -2.3 %
5 years (on annual basis) i 0.8 % 0.1 %
Since inception (on annual basis) i 0.9 % 0.1 %
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

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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 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 (2022-08-31)

Fund
Benchmark
32.6 %
3-5 year
36.1 %
25.2 %
5-7 year
20.5 %
22.5 %
0-3 year
31.4 %
10.1 %
> 10 year
5.0 %
7.5 %
7-10 year
7.0 %
2.0 %
Cash
0.0 %
Total
100 %
100 %

Sector allocation (2022-08-31)

28.7 %
Consumer Goods & Services
23.2 %
Industry
12.8 %
Telecom & Technology
8.7 %
Banks
7.3 %
Insurance
3.7 %
Basic Materials
3.4 %
Utilities
3.3 %
Financial Services & Real estate
2.9 %
Health Care
2.2 %
Energy
2.1 %
Other
1.6 %
Sovereign bonds
Total
100 %

Rating allocation (2022-08-31)

0.2 %
AA
4.1 %
A
18.7 %
BBB
67.8 %
BB
4.4 %
B
2.7 %
Not Rated
2.0 %
Cash
Total
100 %

Top 10 holdings (2022-08-31)

2.1 %
1.250% Cellnex Finance 2021-29
1.8 %
3.021% Ford Motor 2019-24
1.6 %
1.875% Autostrade per Italia 2015-25
1.6 %
0.000% Duitsland 2022-23
1.5 %
1.000% Cellnex Finance 2021-27
1.5 %
3.375% Crown Euro 2015-25
1.5 %
2.500% Volvo Car 2020-27
1.4 %
2.750% Orano 2020-28
1.4 %
2.750% ZF Finance 2020-27
1.4 %
2.875% Thyssenkrupp 2019-24
Total
15.8 %
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

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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

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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

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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.