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 2020-08-31 (rebased)

No chart data available

Performance per 2020-08-31

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  Fund Benchmark
1 month 0.1 % 0.2 %
3 months 3.0 % 3.0 %
This year 1.4 % 0.4 %
2018 -0.4 % -0.8 %
2019 6.2 % 6.3 %
1 year (on annual basis) -0.2 % -0.9 %
Since inception (on annual basis) i 3.6 % 2.9 %
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 960.26 M 2020-08-31
Share class size
EUR 2.08 M 2020-08-31
Number of shares
77,535 2020-08-31
Net Asset Value i
EUR 26.89 2020-09-30
Turnover rate
227.38 %
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 2020-08-31

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  Fund Benchmark
Number of holdings 296 3075
Duration i 5.3 5.3
Yield to maturity 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.

Developments per 2020-08-31

In August, the spread on the iBoxx Euro Corporate Index tightened by 13 basis points to 124 basis points above the government bond curve. The index earned an absolute return of +0.16%. German 10-year government bond yields closed August at -0.40%, representing an increase of 12 basis points compared to the end of July.

Despite the number of Covid-19 infections surpassing the 25mln mark globally, markets took comfort from the fact that the level of hospitalisations in most developed markets remained relatively limited when compared to the peak levels seen earlier this year. This is partly due to the prevalence of relatively young people amongst the newly infected, but also due to improved treatment methods and medications. Importantly, trends in new infections and hospitalisations in the large US states of Texas, California and Florida improved markedly compared to the previous month. Whilst there is a risk that, as the autumn season approaches, more people will be spending time indoors, thereby raising the possibility of a so-called “second wave” of infections, global progress on the medical front continues apace. Markets now expect one or two vaccines to receive regulatory approval by the end of the year, thereby raising investor hopes that, by the second half of 2021, more and more economic sectors, particularly those related to travel & leisure, can revert to normalised levels of activity.

As part of the annual Jackson Hole symposium, Federal Reserve chairman Jerome Powell announced the outcome of the Fed’s monetary policy framework review. Going forward, the Fed will target an average inflation rate of 2%, with a new willingness to maintain low interest rates even if inflation temporarily overshoots the 2% target. The policy change, which reinforced earlier statements that the Fed would maintain low interest rates for the foreseeable future, contributed to a strong demand for riskier assets in both credit and equities. One issue that is slowly beginning to gain attention from investors is the risk of a constitutional crisis in the US if the outcome of the Presidential election in November is subsequently contested on the basis of alleged fraud. Ongoing large-scale protests related to social injustices, accompanied by sporadic violence, point to an increasingly polarised society and electorate.

On the corporate front, a number of large M&A transactions were announced during August, including Siemens Healthineers’ acquisition of US-based Varian Medical Systems for USD 16.4bln and French water and waste management company Veolia Environnement’s proposed acquisition of domestic rival Suez for approximately EUR 10bln. Elsewhere, German utility group RWE issued EUR 2bln of fresh equity to strengthen its balance sheet in the wake of the group’s recent acquisition of solar and wind projects from Nordex.

During the month, subordinated bonds issued by banks and insurers, as well as bonds issued by companies operating in the basic resources, travel & leisure and real estate sectors outperformed. By contrast, bonds issued by companies operating in the healthcare, retail and technology sectors underperformed. Nonetheless, and similar to the previous month, all sectors experienced spread tightening.

The supply of new bonds was EUR 8 billion in August, representing a 71% decrease compared to July and a 72% decrease compared to the year-earlier period. Non-financial sector companies issued EUR 2 billion in new bonds last month, while financial sector companies issued EUR 6 billion in new bonds. During the first eight months of this year, a total of EUR 432 billion of bonds was issued. This represents a 21% increase compared to the year-earlier period.

During the month the portfolio’s sensitivity to market trends varied between 101% and 103%. The portfolio therefore held a neutral to slight overweight positioning in terms of market risk.

Our positioning in the food & beverage, industrial goods & services and technology sectors performed relatively well in August. In contrast, our positioning in the banks, travel & leisure and utilities 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 Euronet Worldwide, SSE, DSV Panalpina, Huntsman Corporation and Great-West Lifeco. By contrast, our overweights in short-dated bonds issued by Bank of America, Eurogrid and Enexis, as well as our underweights in General Electric (excluded), British Petroleum (excluded) and Unibail-Rodamco contributed negatively.

In August, the Fund participated in a new corporate hybrid bond issue from Total.

During the month, the fund increased its exposure to CNH Industrial, one of the world’s largest producers of agricultural equipment with renowned brands such as New Holland and Case, that is also an industry leader in sustainability. CNH Industrial is, for example, committed to reducing CO2 emissions per unit of production by 60% and obtaining 90% of its total electricity consumption from renewable sources by 2030. Furthermore, the group is actively promoting a shift away from diesel-powered commercial vehicles towards LNG-powered vehicles in an effort to tackle NOx emissions and other sources of air pollution.

Outlook
Despite slightly less attractive valuations, we remain relatively constructive on the market for a number of reasons. First, data continues to suggest that economic growth has bottomed. Second, management teams are prioritizing bondholder interests over near-term shareholder interests, as highlighted by the ongoing trend of rights issues. Finally, the technical backdrop remains very robust as a result of the ECB’s willingness and ability to pump liquidity into the government and corporate bond markets.

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 2020-08-31 (rebased)

No chart data available

Performance per 2020-08-31

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  Fund Benchmark
1 month 0.1 % 0.2 %
3 months 3.0 % 3.0 %
This year 1.4 % 0.4 %
2018 -0.4 % -0.8 %
2019 6.2 % 6.3 %
1 year (on annual basis) -0.2 % -0.9 %
Since inception (on annual basis) i 3.6 % 2.9 %
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 (2020-08-31)

Fund
Benchmark
26.2 %
5-7 year
21.3 %
22.6 %
3-5 year
26.7 %
18.7 %
0-3 year
24.8 %
15.4 %
7-10 year
17.0 %
12.7 %
> 10 year
10.2 %
4.5 %
Cash
0.0 %
Total
100 %
100 %

Sector allocation (2020-08-31)

28.6 %
Banks
13.7 %
Consumer Goods & Services
11.3 %
Utilities
10.0 %
Telecom & Technology
7.9 %
Industry
7.1 %
Health Care
6.8 %
Financial Services & Real estate
4.3 %
Other
3.9 %
Insurance
2.7 %
Energy
1.8 %
Sovereign bonds
1.8 %
Basic Materials
0.1 %
Asset Backed Securities
Total
100 %
The cash position is included in ‘Other’.

Rating allocation (2020-08-31)

Fund
Benchmark
1.9 %
AAA
0.4 %
3.4 %
AA
10.7 %
35.5 %
A
39.3 %
49.9 %
BBB
49.6 %
3.1 %
BB
0.0 %
1.7 %
Not Rated
0.0 %
4.5 %
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 (2020-08-31)

1.6 %
0.375% KFW 2015-30
1.3 %
3.875% Eurogrid 2010-20
1.2 %
1.500% Enexis 2015-23
1.1 %
2.000% Daimler 2020-26
1.1 %
0.736% Bank of America 2017-22
1.1 %
1.600% AT&T 2020-28
0.9 %
0.750% PSA Banque France 2018-23
0.9 %
1.950% American Honda 2020-24
0.9 %
1.375% Terna 2017-27
0.9 %
1.090% JP Morgan Chase 2019-27
Total
10.9 %
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.

 

SWING FACTORS

An overview of the current swing factors are available here.

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 %
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
Belgium, France, 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
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 ESG Research
Screening MSCI ESG Research
UN global impact
Bron EN
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.