Kempen Lux Income Fund Class LI

Profile

Kempen International Funds SICAV – Kempen (Lux) Income Fund (the Fund) is designed to achieve current income and capital appreciation over the medium-term by investing primarily in a diversified portfolio of fixed income securities. The Fund employs a top down macro perspective along with bottom-up security selection, with a focus on downside protection.

The Fund does not have a benchmark. Attention: it is envisaged that this share class will be closed for further subscriptions once the Fund (all share classes combined) reaches a size of € 300 million. At the launch of the fund on 7 August 2017 this share class carried a discounted management fee for a maximum period of 3 years to facilitate the initial growth of the Fund, the current discounted management fee is 20 bps. The Board of Directors will decide on the conditions and future of this share class once the 3 years period has lapsed i.e. in July 2020.

Management team

Roelof Salomons, Ivo Kuiper, Kim Lubbers, Hans Kamminga

Performance per 2019-05-31 (rebased)

No chart data available

Performance per 2019-05-31

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  Fund
1 month -0.3 %
3 months 0.6 %
This year 1.7 %
2017 0.3 %
2018 -2.5 %
1 year (on annual basis) 1.1 %
Since inception (on annual basis) i -0.3 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. (Partial) hedging the interest and credit exposure, results in a lower yield for the portfolio.
More information can be found on the documents page of this fund

Key figures

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Share class size
EUR 64.85 M 2019-05-31
Net Asset Value i
EUR 1,000.01 2019-06-26

Fund characteristics per 2019-05-31

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  Fund
Number of holdings 721
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Market developments per 2019-05-31

Risky assets were tested in May after the US announced it would after all raise tariffs on goods imported from China. President Trump increased import tariffs from 10% to 25% and extended them to include more goods. At the end of the month, Trump unexpectedly imposed an import tariff of 5% on Mexico as well in a bid to halt illegal immigration. These announcements came as a surprise to the financial markets and in response equity markets around the world declined and spreads widened. As US and European companies have invested billions of dollars in Mexico as part of their efforts to optimise their North American supply chains, this has increased concerns about lower profitability at these companies in future. Spreads on investment grade corporate bonds widened by 22 basis points, while the spread on the high yield (BB) index widened by 28 basis points.

Bond yields fell worldwide, with US government bond yields dropping by nearly 40 basis points. German 10-year government bond yields dipped to a record low of -0.23%. The market has now priced in several interest rate cuts by the US central bank, as well as a cut of 10 basis points by the ECB. In addition to the escalation in the trade war, this can be attributed to economic indicators that are pointing to a further slowdown in economic growth. The PMI indices in the US were worse than expected and are at their lowest level for three years. Data from the Eurozone displayed a mixed picture. The manufacturing sector continues to perform poorly in Germany, while confidence indicators in France were surprisingly positive.

Tensions again flared in relation to Italy this month. It started when the European Commission adjusted its growth forecast for Italy for 2019 to 0.1%, leading to a further deterioration in the expected budget deficit as well. For 2019 the European Commission anticipates a budget deficit of 2.5%, for 2020 a budget deficit of 3.5%. Italy’s government debt will rise to 135.2% as a result. Later in the month, it became clear that the European Commission is considering sanctioning Italy for its deteriorating public finances. Salvini’s victory in the European Parliament elections did not help either. He used his election win to argue for higher spending, prompting turbulence on the market. There would now also seem to be a higher chance of an early general election in Italy in the wake of the European Parliament elections.

The European Parliament elections otherwise yielded positive results for pro-European parties. Populist parties won more seats than at the last elections in 2014, but fewer than had been predicted.

The number of bonds issued on the European high yield market by non-financial institutions amounted to €7.1 billion in May, up about 31% on last year. For the first time this year, single B-rated bonds dominated bond issues as they accounted for nearly one third of the month’s total. European high yield bond issues totalled €31.5 billion in the first five months of this year, a drop of 16% compared to last year.

Portfolio developments per 2019-05-31

The Kempen Income Fund earned a performance of -0.25% in May. The fund was adversely affected by the wider spreads on corporate bonds, while the sharp dip in German government bond yields had a positive impact on the performance. With the exception of Spain and Portugal, spreads on Eurozone countries versus Germany widened in May, with Italy leading the way at over 30 basis points. The fund profited from its overweight in Spain and underweight in France, while the overweights in Slovenia, Ireland and Belgium contributed negatively to the return.

At individual country level, positive contributions came from the overweights in Tesco, PVH, Huntsman, Fidelity National Information Services, Argenta Spaarbank, Symrise, Becton Dickinson and Morgan Stanley, as well as from the underweights in Chemours, Thyssenkrupp, Samsonite, Daimler, Banco Santander, Crédit Mutuel and ENI. In contrast, the overweights in Schaeffler, Lincoln Finance, Sogecap, Smurfit Kappa, Engie, AB Inbev, Unibail-Rodamco, Crédit Agricole Assurances and CNH Industrial and the underweights in Wind and Elis made a negative contribution.
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2019-05-31 (rebased)

No chart data available

Performance per 2019-05-31

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  Fund
1 month -0.3 %
3 months 0.6 %
This year 1.7 %
2017 0.3 %
2018 -2.5 %
1 year (on annual basis) 1.1 %
Since inception (on annual basis) i -0.3 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. (Partial) hedging the interest and credit exposure, results in a lower yield for the portfolio.

Dividends

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Distributing
No
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Maturity profile (2019-05-31)

24.1 %
7-10 year
20.4 %
5-7 year
18.3 %
> 10 year
18.1 %
3-5 year
17.6 %
0-3 year
1.2 %
Cash
0.4 %
Other
Total
100 %

Sector allocation (2019-05-31)

35.7 %
Corporates
30.9 %
Government
19.9 %
Financials
11.6 %
Semi-Government
0.4 %
Money Market Funds
0.3 %
Asset-Backed Loans
0.0 %
Covered Bonds
1.2 %
Other
Total
100 %

Rating allocation (2019-05-31)

13.4 %
AAA
11.0 %
AA
28.1 %
A
23.3 %
BBB
14.5 %
BB
0.4 %
B
8.0 %
Not Rated
1.2 %
Cash
0.0 %
Other
Total
100 %

Top 10 holdings (2019-05-31)

2.6 %
1.850% Frankrijk I/L 2011-27
2.3 %
1.250% Belgie 2018-33
2.2 %
1.500% Temasek 2016-28
2.1 %
1.125% Corp Andina de Fomento 2018-25
1.9 %
0.750% Nederland 2018-28
1.8 %
0.500% Finland 2016-26
1.8 %
2.625% Letland 2014-21
1.8 %
5.000% Zweden 2003-20
1.5 %
0.800% Belgie 2018-28
1.5 %
1.950% Spanje 2016-26
Total
19.5 %
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Ongoing charges

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Management fee i
0.20 %
Service fee i
0.10 %
Taxe d'abonnement i
0.01 %
Indirect costs i
0.05%-0.10% (estimated range)
Expected ongoing charges i
0.36% - 0.41% (estimated bandwith)

Other costs

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Upward swing factor i
0.10 %
Downward swing factor i
0.10 %
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
LI
Investor type
Institutional
Distributing
No
Duration hedged
No
Investment category
Multi Asset Strategies
Inception date
2017-08-07
Domicile
Luxembourg
May be offered to professional investors only in
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.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.

Tradability

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Minimum subscription
Initial subscription: €1,000, additional subscriptions: €1,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU1626447269
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Kempen's vision & 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.

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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.

Our fund approach to responsible investment

Kempen’s ESG policy is fully implemented in our fund’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership

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ESG is fully integrated into the investment process of the Kempen (Lux) Income Fund, with analysis undertaken both pre-investment and as part of our portfolio monitoring activities. Portfolio managers perform an in-depth analysis of ESG data, and ESG risks and opportunities are taken into account when selecting and monitoring governments, government related issuers and corporates.

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1. Exclusion

In line with the general Kempen policy, the Kempen (Lux) Income Fund excludes all countries and companies of the KCM exclusion- or avoidance list. Companies or countries on these lists are either involved in the production of controversial weapons, derive a significant portion of their revenues from the production or distribution of tobacco, or have been involved in serious controversies.

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2. ESG integration

We flag “low” performing countries and companies. The portfolio managers of the Kempen (Lux) Income Fund and the underlying funds, assesses the materiality of the ESG issue and its implications for the credit profile of the company or country. If an issue is deemed material, our first objective is to engage on the issue. If we can conclude from the engagement that the ESG concerns are not structural and if the company is willing to improve, we make an adjustment in the determination of the relative value of the company’s securities. In severe cases where we do not see any prospect of improvement we forego investment in the country or company.

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The fund performs a quarterly screening using the database MSCI ESG research. The Responsible Investment team conducts the screening, and a review of the ESG ratings of bonds in the portfolio along with discussions on ESG rating developments are conducted by the team.Â

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The following items are discussed on a quarterly basis:

• A review of the ESG ratings of bonds in the portfolio;

• A discussion on any developments / changes in the ESG ratings;

• Screening for controversies using MSCI ESG research;

• Excluding countries and companies based on UN Global Compact criteria;

• Excluding controversial weapon producers.

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Finally, the Kempen (Lux) Income Fund prefers Green bonds rather than a ‘normal bond’ if two bonds have the same risk/return characteristics. We are an active player in the market of green bonds and we have a green bond policy which outlines the guidelines we adhere to defining a green bond.

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3. Active ownership

Where relevant our fund will attempt to use its ownership stakes to engage with investees on ESG issues. For example, in 2018 the fund was part of an engagement with Bayer, following their acquisition of Monsanto. Through the acquisition, Bayer inherited several significant controversies in the field of genetically modified organisms (GMOs). The goal of the engagement is to get a formal and written statement from the company which states that they will not sue small holder farmers for the unintended use of Bayer licensed GMO crops. It also asks the company to set a target for the number of farmers that receive education on their crop protection products.

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In addition the fund has ongoing engagement cases with Volkswagen on its company culture, Cez on the use of thermal coal, Glencore on climate action and Huntsman on ESG disclosure.

ESG Report
Kempen (Lux) Income 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 as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland 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. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.