Kempen Lux Euro Sustainable Credit Fund - Class AN


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 2019-01-31 (rebased)

No chart data available

Performance per 2019-01-31

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  Fund Benchmark
1 month 1.1 % 1.1 %
3 months 0.9 % 0.6 %
This year 1.1 % 1.1 %
2018 -0.4 % -0.8 %
Since inception (on annual basis) i 0.7 % 0.3 %
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 201.08 M 2019-01-31
Share class size
EUR 0.00 M 2019-01-31
Number of shares
40 2019-01-31
Net Asset Value i
EUR 25.33 2019-02-19

Fund characteristics per 2019-01-31

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  Fund Benchmark
Number of holdings 251 2410
Duration i 5.1 4.9
Yield to maturity 1.3 % 1.4 %
Weighted rating A- BBB+

Market developments per 2019-01-31

In January, the spread on the iBoxx Euro Corporate Index tightened by 12 basis points to 160 basis points above the government bond curve. The index earned an absolute return of 1.10%. German 10-year government bond yields closed January at 0.15%, 9 basis points lower than at the end of December.

There are increasing signs that global economic growth is weakening, particularly in Europe and in China. Examples include the economic recession in Italy, the falling IFO business climate index in Germany and Chinese car sales that in December were down 16% compared to the year earlier period. A multitude of factors seems to be responsible for the slowdown in growth, including the uncertainty surrounding Brexit, the difficult trade relations between the US and China and the impact of monetary tightening.

In spite of the deteriorating economic conditions, sentiment on the European corporate bond market underwent an almost total reversal from the negativity that dominated the fourth quarter of 2018. This U-turn in investor sentiment seems to be mainly driven by expectations that the US central bank will pursue a much less aggressive monetary policy in 2019 than had initially been feared. In December last year, Fed chairman Jay Powell claimed that the reduction in the Fed’s balance sheet was on automatic pilot and that further gradual increases in interest rates were likely. Yet Powell adopted a more nuanced tone in January. The Fed now intends to be patient on further interest rate hikes and the reduction of the balance sheet will now depend on how economic data evolve.

Subordinated bonds issued by insurers and non-financial companies performed better than average in January. At sector level, real estate and industrial goods were the star performers. Spreads on bonds issued by US conglomerate General Electric tightened by 30 to 80 basis points after the company announced additional measures to reduce its debt at an accelerated pace and improve its liquidity position.

The supply of new bonds amounted to EUR50 billion in January, about 2% up on a year earlier. Non-financial sector companies issued EUR30 billion in new bonds last month, while financial sector companies issued EUR20 billion in bonds.

Portfolio developments per 2019-01-31

The Fund aims to avoid investments that act in breach with the VFI Richtlijn Financieel Beheer Goede Doelen (VFI Directive Financial Management Charities). De VFI Directive consists of basic guidelines and additional guidelines. The basic guideline advises institutions to investigate investments on violations of among others human rights, corruption and protection of the environment. The additional guideline is developed for organisations that want to apply stricter sustainability criteria in the investment policy. This directive includes further exclusions of companies involved in for example nuclear power, alcohol, tobacco, laboratory animals, adult entertainment and genetic modification. Each quarter, the investment universe is screened for violation of the VFI Directive. This screening is conducted based on the MSCI ESG Research database.

During the month, the portfolio’s sensitivity to market trends varied between 91% and 101%. The portfolio therefore held an underweight to neutral positioning in terms of market risk.

Our positioning in the telecom, banking and insurance sectors performed relatively well in January. In contrast, our positioning in the infrastructure, auto and utilities sectors contributed negatively. Our liquidity position (in the shape of cash and government bonds) had a neutral impact.

At individual company level there were positive contributions from the overweights in Telefonica, OMV, Groupe La Poste, Caixabank and Solvay. In contrast, the overweights in Enexis and Equinor, as well as the underweights in General Electric (excluded), Volkswagen (excluded) and Atlantia (excluded) made a negative contribution.

In January, the Fund participated in new bond issues by ING, Elia, Banque Federative du Credit Mutuel, BPCE, ABN AMRO, Deutsche Bahn, Bank of New Zealand, Fresenius, Vonovia, Argenta Spaarbank, Smurfit Kappa, Telefonica and Digital Realty Trust.

The bond issues by Digital Realty Trust and Telefonica were “green bonds”. US data centre company Digital Realty Trust will use the proceeds to invest in sustainable energy projects, to improve its energy efficiency and make its company premises more sustainable. Telefonica, on the other hand, will use the proceeds to replace its copper telecom network with a fibre optic network. In doing so, Telefonica expects to achieve energy savings of 85% per user.

The material tightening of spreads since the start of this year has led to a decrease in the number of interesting investment opportunities. Combined with the multiple signs of a slowdown in global economic growth and our forecast that the supply of new bonds will increase significantly in the next few months as a result of the attractive rates at which companies can obtain funding, we have decided to reduce the level of risk in the portfolio.

Performance per 2019-01-31 (rebased)

No chart data available

Performance per 2019-01-31

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  Fund Benchmark
1 month 1.1 % 1.1 %
3 months 0.9 % 0.6 %
This year 1.1 % 1.1 %
2018 -0.4 % -0.8 %
Since inception (on annual basis) i 0.7 % 0.3 %
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.


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Maturity profile (2019-01-31)

27.8 %
5-7 year
19.3 %
23.6 %
3-5 year
27.4 %
20.5 %
0-3 year
26.1 %
18.3 %
7-10 year
19.5 %
8.1 %
> 10 year
7.7 %
1.7 %
0.0 %
100 %
100 %

Sector allocation (2019-01-31)

29.6 %
16.3 %
Consumer Goods & Services
12.2 %
8.3 %
7.9 %
Telecom & Technology
6.7 %
Financial Services & Real estate
5.1 %
Health Care
5.0 %
3.3 %
2.7 %
2.2 %
Basic Materials
0.7 %
Asset Backed Securities
100 %
The cash position is included in ‘Other’.

Rating allocation (2019-01-31)

0.5 %
0.5 %
6.3 %
11.1 %
37.9 %
39.1 %
47.6 %
49.3 %
3.7 %
0.0 %
2.3 %
Not Rated
0.0 %
1.7 %
0.0 %
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 (2019-01-31)

2.0 %
1.500% Enexis 2015-23
1.8 %
2.875% Equinor 2013-25
1.4 %
3.875% Eurogrid 2010-20
1.2 %
2.375% Priceline 2014-24
1.2 %
1.375% DS Smith 2017-24
1.2 %
1.375% Tesco 2018-23
1.1 %
0.500% Daimler 2016-19
1.0 %
1.750% Atos 2018-25
1.0 %
1.125% Deutsche Bahn 2019-28
1.0 %
2.000% Renault 2019-24
12.8 %

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%.

Share class details

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Share class
AN i
Investor type
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
Investment category
European credits
Inception date
May be offered to all investors in
France, Luxembourg, The Netherlands
UCITS status i
Open-end i
Base currency
Share class currency
Management company
Kempen Capital Management N.V.
J.P. Morgan Bank Luxembourg S.A.


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Minimum subscription
Initial subscription €1
Subscription/Redemption Frequency

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. Our full voting records are available here.

Our fund approach to Responsible Investment

The Kempen (Lux) Euro Sustainable Credit Fund has a more strict ESG process than other in-house credit funds. In addition to exclusion of companies that are on the general KCM exclusion list, it excludes companies that have violate the UN Global compact or the additional ethical guidelines, such as companies associated with nuclear energy, coal, alcohol, tobacco, adult entertainment and gambling. Furthermore, besides excluding companies associated with the production of controversial weapons, our definition includes any sort of military weapons.

An engagement approach is chosen for companies that are involved in GMO, factory farming, animal testing or if less than 5% of their revenue is derived from the production of fur or fur products.