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 close the Fund as per 5 January 2016. As per June 2016 the Fund will continue to accept daily inflow below EUR 2 million from only existing investors. For investments greater than EUR 2 million please contact the Fund’s relationship manager. Redemptions will still be possible. More information about the soft close 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

Performance per 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -0.0 % -0.1 %
3 months -0.1 % -0.3 %
This year -0.4 % -0.7 %
2015 -0.1 % -0.7 %
2016 4.8 % 4.7 %
2017 2.3 % 2.4 %
1 year (on annual basis) 1.2 % 1.1 %
3 years (on annual basis) i 2.6 % 2.4 %
Since inception (on annual basis) i 3.4 % 3.1 %
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 191.96 M 2018-06-30
Share class size
EUR 149.31 M 2018-06-30
Number of shares
139,384 2018-06-30
Net Asset Value i
EUR 1,074.17 2018-07-17
Morningstar rating â„¢

Fund characteristics per 2018-06-30

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  Fund Benchmark
Number of holdings 235 2256
Duration i 5.3 5.1
Yield to maturity 1.2 % 1.3 %
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 2018-06-30

In June, the spread on the iBoxx Euro Corporate Index widened by 4 basis points to 136 basis points above the government bond curve. The index earned an absolute return of -0.05%. German 10-year government bond yields closed June at 0.30%, a decline of 4 basis points compared to the end of May.

The ECB has announced that it will reduce it CSPP bond-buying programme from EUR30 billion to EUR15 billion per month starting in October, with a further reduction down to zero as of the end of this year. Interest income and proceeds from redemptions stemming from the bond portfolio the ECB has already built up will continue to be reinvested. The ECB will not raise interest rates until half way through 2019 at the earliest. The latter announcement was a surprise to the market and contributed to the slight decline in German 10-year government bond yields. Other developments that contributed to this were the political squabbling within the German government on immigration policy and signs that the previously highly robust European economy is weakening.

Bonds issued by companies operating in the auto industry performed especially poorly in June. This was primarily due to US President Trump’s threats to levy taxes on vehicles imported from Europe. A profit warning from German car manufacturer Daimler exacerbated the situation. Bonds issued by companies operating in the basic resources sector were also adversely affected by the growing threat of a trade war and the potentially negative impact this could have on economic growth and demand for metals and commodities.

Spreads on corporate bonds were also negatively affected by the generous premiums companies were forced to pay compared to outstanding bonds in order to place new bonds in June. The payment of such premiums seemed to be a prerequisite for companies to be able to issue new bonds. Yet even these generous premiums were not always enough to ensure a successful bond issue. Polish real estate company EPP, for instance, had to withdraw an announced bond issue due to the lack of demand among investors.

The supply of new bonds was EUR31 billion in June, about 22% lower than in May and down approximately 28% compared to a year ago. Non-financial sector companies issued new bonds worth EUR25 billion last month, while financial sector companies issued EUR6 billion in new bonds. Bonds worth EUR234 billion were issued in the first half of this year, a drop of about 12% compared to the same period last year.

Portfolio developments per 2018-06-30

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 97% and 100%. The portfolio therefore held a slight underweight positioning in terms of market risk.

Our positioning in the banking, auto and insurance sectors performed relatively well in June. In contrast, our positioning in the industrial goods, utilities and telecom sectors contributed negatively to the return. 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 Groupe Bruxelles Lambert and Booking Holdings, as well as from the underweights in Deutsche Bank, Volkswagen (excluded), Daimler and Generali. In contrast, the overweights in Orsted, DS Smith, NN Group and Orange contributed negatively.

In June, the Fund participated in new bond issues by e.g. Carrefour, Groupe Bruxelles Lambert, OMV (subordinated), JAB Holding, Vonovia, O2 Telefonica Deutschland and KBC.

The bond issued by KBC was a so-called “green bond”. The proceeds from this bond will be used by the Belgian bank to finance sustainable housing and renewable energy projects. KBC is considered to be a leader in the ESG field within the banking sector.

Outlook
We will maintain our conservative positioning for the time being. This positioning reflects our concerns about the trend for de-allocation from the credits asset class, the further tapering of the ECB’s CSPP programme later this year and the higher idiosyncratic risks at companies.

Given the material widening of spreads since the start of this year and the steeper spread curves, we can identify a growing number of interesting investment opportunities that we will use to selectively add more risk to the 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 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -0.0 % -0.1 %
3 months -0.1 % -0.3 %
This year -0.4 % -0.7 %
2015 -0.1 % -0.7 %
2016 4.8 % 4.7 %
2017 2.3 % 2.4 %
1 year (on annual basis) 1.2 % 1.1 %
3 years (on annual basis) i 2.6 % 2.4 %
Since inception (on annual basis) i 3.4 % 3.1 %
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 (2018-06-30)

Fund
Benchmark
22.7 %
7-10 year
20.4 %
22.3 %
5-7 year
20.4 %
20.2 %
0-3 year
24.1 %
18.5 %
3-5 year
27.3 %
11.1 %
> 10 year
7.9 %
5.2 %
Cash
0.0 %
Totaal
100 %
100 %

Sector allocation (2018-06-30)

30.3 %
Banks
13.8 %
Utilities
13.3 %
Consumer Goods & Services
7.3 %
Industry
7.1 %
Telecom & Technology
6.5 %
Financial Services & Real estate
5.3 %
Other
5.0 %
Energy
4.5 %
Insurance
3.6 %
Health Care
2.3 %
Basic Materials
1.2 %
Asset Backed Securities
Totaal
100 %
The cash position is included in ‘Other’.

Rating allocation (2018-06-30)

Fund
Benchmark
1.7 %
AAA
0.3 %
9.1 %
AA
5.8 %
35.2 %
A
38.5 %
41.9 %
BBB
55.4 %
2.7 %
BB
0.0 %
4.2 %
Not Rated
0.0 %
5.2 %
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 (2018-06-30)

1.9 %
2.875% Equinor 2013-25
1.6 %
1.500% Enexis 2015-23
1.5 %
3.875% Eurogrid 2010-20
1.2 %
1.000% OMV 2017-26
1.1 %
0.500% Daimler 2016-19
1.1 %
1.375% Terna 2017-27
1.1 %
0.625% JP Morgan Chase 2016-24
1.0 %
2.375% Priceline 2014-24
1.0 %
1.375% DS Smith 2017-24
1.0 %
5.250% Fraport 2009-19
Totaal
12.6 %
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, 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.