Kempen Lux Euro Sustainable Credit Fund - Class J

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 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

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  Fund Benchmark
1 month 0.2 % 0.2 %
3 months -0.3 % -0.6 %
This year -0.8 % -1.3 %
2015 -0.1 % -0.7 %
2016 4.8 % 4.7 %
2017 2.3 % 2.4 %
1 year (on annual basis) -0.8 % -1.3 %
3 years (on annual basis) i 2.0 % 1.9 %
5 years (on annual basis) i 2.9 % 2.6 %
Since inception (on annual basis) i 3.0 % 2.7 %
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 200.70 M 2018-12-31
Share class size
EUR 149.36 M 2018-12-31
Number of shares
139,957 2018-12-31
Net Asset Value i
EUR 1,049.94 2019-01-23
Morningstar rating â„¢

Fund characteristics per 2018-12-31

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  Fund Benchmark
Number of holdings 248 2399
Duration i 5.1 5.5
Yield to maturity 1.4 % 1.6 %
Weighted rating A- BBB+
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Market developments per 2018-12-31

In December, the spread on the iBoxx Euro Corporate Index widened by 6 basis points to 172 basis points above the government bond curve. The index earned an absolute return of 0.17%. German 10-year government bond yields closed December at 0.24%, a decrease of 7 basis points compared to the end of November.

The negative sentiment seen on the European corporate bond market during the previous two months continued in December. There is a long list of risks and economic and political developments that investors are viewing with suspicion and that are contributing to the negative sentiment. Examples include: 1) the trade war between China and the US; 2) the shutdown of the US federal government caused by disagreement between the Democrats in the House of Representatives and President Trump on the need for extending the wall on the border with Mexico; 3) the persisting riots and protests by the ‘yellow vests’ in France that are putting pressure on President Macron’s agenda for economic reforms; 4) the slowdown in economic growth in a number of important regions, such as Europe and Asia; 5) the deteriorating creditworthiness of companies caused by a combination of growing debt positions, lower profitability and decreasing diversification due to the dismantling of conglomerate structures; 6) the end of the ECB’s bond-buying programme; and 7) ongoing de-allocation from the corporate bond asset class.

Although the raising of US interest rates by 25 basis points at the end of the month did not come as a surprise, the accompanying remarks by US central bank chairman Jay Powell that the reduction of the Fed’s balance sheet would remain on automatic pilot were badly received by the financial markets. Investors are worried that the US central bank is insufficiently taking into account the potential negative impact that the recent weakness in the equity and corporate bond markets will have on the economy in the long term.

In contrast to last month, subordinated bonds issued by banks and insurers performed better than average. Bonds issued by companies in the real estate, retail and chemical sectors performed worse than average. Sentiment towards French companies was clearly adversely affected by the occasionally violent protests in France.

The supply of new bonds amounted to EUR5 billion in December, about 90% down on November and only just over half the figure for the same month a year earlier. Non-financial sector companies issued EUR5 billion in new bonds, while financial sector companies refrained from issuing new bonds. Bonds worth EUR414 billion were issued over 2018 as a whole, a drop of about 6% compared to the previous year.

Portfolio developments per 2018-12-31

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 92% and 96%. The portfolio therefore held an underweight positioning in terms of market risk.

Our positioning in the healthcare, chemicals and real estate sectors performed relatively well in December. In contrast, our positioning in the industrial goods and insurance sectors, as well as non-bank financial service providers, contributed negatively. Our liquidity position (in the shape of cash and government bonds) had a positive impact.

At individual company level, positive contributions came from the overweights in OMV, Renault, Solvay, Merck, Stryker and Takeda, as well as from the underweights in EDF (excluded) and Fresenius. In contrast, the overweights in EP Infrastructure, London Stock Exchange, Phoenix Group and DS Smith, as well as the underweights in General Electric (excluded), Generali and Total (excluded) made a negative contribution.

In December, the Fund participated in a new bond issue by SAP. This German software company is seen as an ESG leader in the IT industry. This is particularly so in relation to the personal development and training of employees and canvassing of employee satisfaction via engagement surveys. Moreover, the company has earmarked sustainable energy as a strategic pillar. SAP aims to reduce the environmental impact of its customers by providing cloud computing services and smart networks.

Outlook
The material widening of spreads over the past few months has led to a significant increase in the number of interesting investment opportunities. Furthermore, we expect that a number of the risks listed above will diminish in intensity in the next few months. As a result, we will slightly increase the level of risk in our portfolio.
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

Slide to see more
  Fund Benchmark
1 month 0.2 % 0.2 %
3 months -0.3 % -0.6 %
This year -0.8 % -1.3 %
2015 -0.1 % -0.7 %
2016 4.8 % 4.7 %
2017 2.3 % 2.4 %
1 year (on annual basis) -0.8 % -1.3 %
3 years (on annual basis) i 2.0 % 1.9 %
5 years (on annual basis) i 2.9 % 2.6 %
Since inception (on annual basis) i 3.0 % 2.7 %
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
Yes
Last dividend
EUR 21.96
Ex-date last dividend
2018-01-22
Number of distributions per year
1
Dividend calendar
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Maturity profile (2018-12-31)

Fund
Benchmark
22.6 %
3-5 year
28.2 %
22.2 %
5-7 year
19.5 %
21.2 %
0-3 year
24.8 %
17.6 %
7-10 year
19.9 %
11.9 %
> 10 year
7.7 %
4.5 %
Cash
0.0 %
Totaal
100 %
100 %

Sector allocation (2018-12-31)

28.7 %
Banks
13.9 %
Consumer Goods & Services
11.6 %
Utilities
7.5 %
Telecom & Technology
7.4 %
Industry
6.1 %
Financial Services & Real estate
5.2 %
Insurance
4.7 %
Health Care
4.6 %
Energy
4.5 %
Other
2.7 %
Sovereign bonds
2.0 %
Basic Materials
1.0 %
Asset Backed Securities
Totaal
100 %
The cash position is included in ‘Other’.

Rating allocation (2018-12-31)

Fund
Benchmark
3.9 %
AAA
0.5 %
6.7 %
AA
11.1 %
36.8 %
A
39.2 %
43.1 %
BBB
49.2 %
2.8 %
BB
0.0 %
2.2 %
Not Rated
0.0 %
4.5 %
Cash
0.0 %
Totaal
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 (2018-12-31)

1.8 %
2.875% Equinor 2013-25
1.7 %
0.375% KFW 2015-30
1.6 %
1.500% Enexis 2015-23
1.4 %
3.875% Eurogrid 2010-20
1.1 %
0.500% Daimler 2016-19
1.0 %
0.000% KFW 2016-21
1.0 %
1.875% OMV 2018-28
1.0 %
2.375% Priceline 2014-24
0.9 %
1.375% DS Smith 2017-24
0.9 %
1.375% Tesco 2018-23
Totaal
12.3 %
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Ongoing charges

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Management fee i
0.32 %
Service fee i
0.15 %
Taxe d'abonnement i
0.01 %
Expected ongoing charges i
0,48 %

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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Share class
J
Investor type
Institutional
Distributing
Yes
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
No
Investment category
Credits
Universum
European credits
Inception date
2013-10-08
Domicile
Luxembourg
May be offered to professional investors only in
Belgium, France, Luxembourg, Switzerland, The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢

Tradability

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Minimum subscription
Initial subscription: €50,000, additional subscriptions: €10,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0979491239
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.
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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

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.

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 Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents 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/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.