Kempen Lux Euro Sustainable Credit Fund - Class AN

Profile

Kempen International Funds SICAV - Kempen (Lux) Euro Sustainable Credit Fund (the Fund) invests primarily in credits that have an investment grade rating (of minimal BBB-) and are denominated in Euros. In addition, these companies must comply with strict sustainability criteria. The Fund may invest a small part in credits that are not included in the benchmark.

The benchmark, the Markit iBoxx Euro Corporates Index, only includes bonds with an investment grade rating. The Fund aims to earn a higher total long term return than the benchmark by implementing an active investment policy. In order to achieve this, a diversified portfolio is constructed and investment risks are continuously monitored. Investments are selected on the basis of extensive analysis of the terms and conditions of the bond issues.

In the interest of the shareholders it has been decided to soft open the Fund as per 28 June 2018. As per June 2018 the Fund will continue to accept daily inflow below EUR 10 million from all investors. For investments greater than EUR 10 million please contact the Fund’s relationship manager. Redemptions will still be possible. More information about the soft open can be found in the Notice to shareholders in the tab Documents.

Management team

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

Performance per 2019-12-31 (rebased)

No chart data available

Performance per 2019-12-31

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  Fund Benchmark
1 month -0.1 % -0.1 %
3 months -0.7 % -0.5 %
This year 6.2 % 6.3 %
2018 -0.4 % -0.8 %
1 year (on annual basis) 6.2 % 6.3 %
Since inception (on annual basis) i 4.5 % 4.0 %
Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. 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 639.48 M 2019-12-31
Share class size
EUR 0.23 M 2019-12-31
Number of shares
8,858 2019-12-31
Net Asset Value i
EUR 26.64 2020-01-24

Fund characteristics per 2019-12-31

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  Fund Benchmark
Number of holdings 268 2820
Duration i 5.3 5.2
Yield to maturity 0.5 % 0.7 %
Weighted rating A- A-
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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.

Market developments per 2019-12-31

In December, the spread on the iBoxx Euro Corporate Index tightened by 11 basis points to 104 basis points above the government bond curve. The index earned an absolute return of -0.06%. German 10-year government bond yields closed December at -0.19%, an increase of 17 basis points compared to the end of November.

Risk appetite amongst investors further improved during the month and there was a clear shift away from risk-free assets such as government bonds into corporate bonds and equities. Fears of a trade-induced global economic recession during 2020 eased after the United States agreed to not impose additional import tariffs on China, whilst also halving the level of tariffs that had been imposed on USD 120 billion of imports in September. China and the United States now expect to conclude a “phase-one” trade agreement on the 15th of January, 2020. This phase-one trade agreement is expected to see China significantly ramp up its purchases of agricultural commodities from the United States, whilst also promising to better protect the intellectual property rights of foreign companies.

Investor sentiment was further boosted by the strong 80 seat majority achieved by prime minister Boris Johnson’s Conservative party in the British parliamentary election held on the 12th of December. After years of parliamentary gridlock on the issue, investors appear to appreciate the fact that there is now clarity on whether Brexit will take place (it will) and when (31st of January, 2020). The fact that Labour leader Jeremy Corbyn’s proposed policies of higher taxation and industry nationalisations failed to receive an electoral mandate was also viewed with relief. Political commentators believe that prime minister Johnson will now find it easier to pass a trade deal with the European Union as he is now less beholden to the wishes of the most strident Brexiteers, given the size of his parliamentary majority. Despite the bullish market reaction to Johnson’s victory, uncertainty remains on whether the European Union and the UK will be able to reach a trade deal before the deadline of December 2020. After this deadline passes - assuming no extension is agreed between the two parties - trade barriers will be imposed. Finally, the strong showing by the Scottish National Party in the elections has rekindled the threat of Scotland eventually breaking away from the rest of Great Britain.

During the month, there was spread tightening across all sectors. However, subordinated bonds issued by insurance companies, as well as senior bonds issued by automotive and retail companies posted above-average performance. Senior bonds issued by companies in the utilities, construction and insurance sector underperformed.

The supply of new bonds was EUR 8 billion in December, representing a decrease of 87% compared to November but an increase of 60% compared to the year-earlier period. Non-financial sector companies issued EUR 3 billion in new bonds last month, while financial sector companies issued EUR 5 billion in new bonds. New bonds totalling EUR 553 billion were issued this year, representing an increase of 33% compared to the same period last year.

Portfolio developments per 2019-12-31

During the month the portfolio’s sensitivity to market trends varied between 88% and 94%. The portfolio therefore held an underweight positioning in terms of market risk.

Our positioning in the telecom, real estate and basic resources sectors performed relatively well in December. In contrast, our positioning in the banks, personal & household goods and oil & gas sectors contributed negatively. Our liquidity position (in the form of cash and government bonds) had a negative impact.

At individual company level, positive contributions came from the overweights in Voestalpine, Verizon, Renault, Schaeffler, National Grid and La Poste. By contrast, our underweights in Volkswagen (excluded) and Banco Santander, as well as our overweight in Elia and short-dated bonds issued by Bank of America and Morgan Stanley contributed negatively.

In December, the Fund participated in a new bond issue from Chubb.

During the month, the Fund built up a position in bonds issued by Sweden-based Essity. Essity is regarded as the leader within the hygiene-paper industry with respect to its energy and carbon reduction programs. In 2018, the company, for example, introduced greenhouse gas emission reduction targets approved by the Science Based Targets initiative. This initiative is a global collaboration with the aim to enable companies to cut their greenhouse gas emissions at a level that allows the world to halt global warming at 2 degrees Celsius. Finally, the company demonstrates responsible fibre sourcing practices.

Outlook
We will maintain our underweight positioning in the portfolio, following the significant tightening of spreads during 2019 and expectations for a material pick-up in new bond issuance in January.
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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 2019-12-31 (rebased)

No chart data available

Performance per 2019-12-31

Slide to see more
  Fund Benchmark
1 month -0.1 % -0.1 %
3 months -0.7 % -0.5 %
This year 6.2 % 6.3 %
2018 -0.4 % -0.8 %
1 year (on annual basis) 6.2 % 6.3 %
Since inception (on annual basis) i 4.5 % 4.0 %
Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. 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 Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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 (2019-12-31)

Fund
Benchmark
28.4 %
3-5 year
27.1 %
19.3 %
5-7 year
21.8 %
18.9 %
0-3 year
25.1 %
16.3 %
7-10 year
17.1 %
14.1 %
> 10 year
9.0 %
3.0 %
Cash
0.0 %
Total
100 %
100 %

Sector allocation (2019-12-31)

30.5 %
Banks
12.3 %
Consumer Goods & Services
11.3 %
Utilities
8.5 %
Telecom & Technology
6.9 %
Industry
6.6 %
Financial Services & Real estate
6.3 %
Health Care
6.1 %
Sovereign bonds
3.9 %
Insurance
3.5 %
Energy
2.9 %
Other
1.0 %
Basic Materials
0.2 %
Asset Backed Securities
Total
100 %
The cash position is included in ‘Other’.

Rating allocation (2019-12-31)

Fund
Benchmark
6.4 %
AAA
0.4 %
4.3 %
AA
10.7 %
42.0 %
A
39.6 %
41.4 %
BBB
49.4 %
2.0 %
BB
0.0 %
0.9 %
Not Rated
0.0 %
3.0 %
Cash
0.0 %
Total
100 %
100 %
The rating allocation of the Fund is based on the Bloomberg Composite method. The rating allocation of the benchmark is based on the rating allocation used by provider Markit iBoxx.

Top 10 holdings (2019-12-31)

2.4 %
0.375% KFW 2015-30
1.6 %
0.625% Landwirtsch.Rentenbank 2015-30
1.6 %
3.875% Eurogrid 2010-20
1.4 %
1.500% Enexis 2015-23
1.2 %
0.736% Bank of America 2017-22
1.2 %
0.875% Equinor 2015-23
1.1 %
0.750% PSA Banque France 2018-23
1.1 %
1.750% Morgan Stanley 2016-24
1.1 %
1.375% Terna 2017-27
0.9 %
0.250% La Banque Postale 2019-26
Total
13.4 %
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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.

Ongoing charges

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Management fee i
0.32 %
Service fee i
0.15 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
0.52 %

Other costs

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Upward swing factor i
0.20 %
Downward swing factor i
0.20 %
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 1 January 2018 the swing factor has been adjusted from 0.25%/0.25% to 0.20%/0.20%.
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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
Markit iBoxx Euro Corporates Index
Duration hedged
No
Investment category
Credits
Universum
European credits
Inception date
2018-09-20
Domicile
Luxembourg
May be offered to all investors in
France, 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.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.

Tradability

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Minimum subscription
Initial subscription €1
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0979490777
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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 Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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'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.6

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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.

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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.

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Our full voting records are available here.

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OUR FUND APPROACH TO RESPONSIBLE INVESTMENT

Kempen (Lux) Euro Sustainable Credit Fund primarily aims to generate a long-term return in excess of the Markit iBoxx Euro Corporates Index (the “Benchmark”), comprising capital growth and income, by investing in corporate bonds issued by companies which comply with strict sustainability criteria.

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We strive to invest in companies that have a lower carbon intensity than their sector peers, or in companies that are willing and able to considerably lower their carbon intensity to a level below their sector peers – ideally in line with the Paris goals. We encourage this via continuing engagements with companies, clients, investors and other stakeholders.

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Kempen’s ESG policy is implemented in our fund’s investment process by the following pillars: Exclusion, Integration and Active ownership.

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Exclusion & Avoidance

In line with the general Kempen policy, the Kempen (Lux) Euro Sustainable Credit Fund excludes all companies on the KCM Exclusion- or Avoidance list.

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Companies that ‘Fail’ marked against the criteria of the United Nations Global Compact or those companies that attract a red flag on the MSCI ESG impact monitor are excluded.

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Companies scoring an MSCI ESG rating CCC are excluded. Companies that score a MSCI ESG rating of B are excluded on a comply or explain basis.

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The Kempen (Lux) Euro Sustainable Credit Fund also excludes companies based on additional sustainability criteria as listed in the table below.

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More information on our exclusion criteria and thresholds can be found here.

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EXCLUSION CRITERIA KEMPEN (LUX) EURO SUSTAINABLE CREDIT FUND

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KEMPEN CRITERIA

ADDITIONAL SUSTAINABILITY CRITERIA

Business Conduct

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x    Human Rights

v

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x    Labour

v

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x    Environment

v

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x    Anti-corruption

v

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Product Involvement

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x    Controversial Weapons

v

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x    Tobacco

v

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x    Adult Entertainment

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v

x    Alcohol

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v

x    Animal Welfare & GMO

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v

x    Gambling

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v

x    Power Generation Nuclear

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v

x    Power Generation Carbon Intensive

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v

x    Thermal Coal

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v

x    (Un)conventional Oil & Gas Extraction

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v

x    Weaponry

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v

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ESG Integration

The assessment of companies’ ESG profiles is an integral part of our investment process. We assess 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.

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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.

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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.

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Active Ownership

As active investors we perform comprehensive engagements with our portfolio companies with the objective to unlock value and reduce risk.

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Our engagement process defines clear objectives of which the progress and result is tracked and well documented. If at any stage the company refuses to cooperate, divestment has to be considered.

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Engagement examples can be found here

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Risks

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

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*

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
Febelfin
Label ISR
Screening MSCI Research
Screening MSCI Research
UN Global Compact
Source
disclaimer
Kempen (Lux) Euro Sustainable Credit 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 6H, route de Trèves, L-2633 Senningerberg, 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.