Kempen Lux Income Fund Class LR

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. The discounted management fee of 34bps will remain for a period of 3 years starting at the launch of the share class, to facilitate the initial growth of the Fund. After this period the Board of Directors will decide on the conditions and future of this share class.

Management team

Roelof Salomons, Ivo Kuiper, Kim Lubbers

Performance per 2018-11-30 (rebased)

No chart data available

Performance per 2018-11-30

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  Fund
1 month -0.6 %
3 months -0.8 %
This year -2.5 %
2017 -0.0 %
1 year (on annual basis) -2.5 %
Since inception (on annual basis) i -2.5 %
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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Total fund size
EUR 75.95 M 2018-11-30
Share class size
EUR 7.69 M 2018-11-30
Number of shares
316,033 2018-11-30
Net Asset Value i
EUR 24.30 2018-12-17

Fund characteristics per 2018-11-30

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  Fund
Number of holdings 696

Market developments per 2018-11-30

German 10-year government bond yields closed November at 0.31%, a decline of 7 basis points compared to the end of October. It is nearly two years since we last saw German bond yields at this level. The spread on the index for investment grade corporate bonds widened by 21 basis points to 166 basis points above the government bond curve. The index earned an absolute return of -0.66%. The spread on the High Yield (BB) index widened by 46 basis points, resulting in an absolute return of -1.5%.
Last month’s negative sentiment on the European corporate bond market deteriorated further in November. Investors seem to prefer the safest investments, including German and US government bonds and cash.
Many of the themes that have triggered instability this year, such as Italy, the Brexit and the trade war, flared up again this month. The European Commission rejected Italy’s budget in mid-November and subsequently advised ECOFIN to initiate infringement proceedings against the country. This caused Italian spreads to widen even further. Later in November, however, the tone of discussions between Italy and the EU became slightly more constructive. It looks as if policymakers are prepared to reduce the budget deficit from 2.4% to 2.0% in 2019, but agreement has not yet been reached.

Progress was also made on the UK’s exit from the European Union (EU). Prime Minister May negotiated a Brexit agreement with the EU and all the EU countries agreed to it. The next step is a vote on the agreement in the UK parliament. This will be a much tougher task as there does not appear to be a majority in favour of it.

In addition, oil prices noted a sharp drop of over 20% in November. This can chiefly be attributed to events relating to supply. OPEC may cut production to stabilise prices at a higher level.

A number of trends also affected the corporate bond market specifically this month: 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; the end of the ECB’s bond-buying programme; and the persisting de-allocation from the corporate bond asset class.

Portfolio developments per 2018-11-30

November was a negative month for the Kempen Income Fund. The portfolio earned a return of -0.61%. With the exception of Italian government bonds, differences in yield between Germany and the other Eurozone countries widened in November. The spread on Italian 10-year government bonds tightened by 15 basis points, while spreads on other countries widened by a few basis points. We hold a small overweight in Italy, but larger overweights in Spain, Ireland, Slovenia and Portugal. Our overweights in these government bonds therefore contributed negatively to the relative performance.

At individual company level, positive contributions came from the overweights in Atos, Takeda, Pharmaceutical, ING, Becton Dickinson Tesco, RWE DEA and DS Smith, as well as from the underweights in Daimler, Banco Santander, HSBC, Telecom Italia, Jaguar Land Rover, Grupo Antolin and thyssenkrupp. In contrast, the overweights in General Electric, Telefonica, OMV, Colfax, Volkswagen, Samvardhana Motherson and Aroundtown made a negative contribution.

Performance per 2018-11-30 (rebased)

No chart data available

Performance per 2018-11-30

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  Fund
1 month -0.6 %
3 months -0.8 %
This year -2.5 %
2017 -0.0 %
1 year (on annual basis) -2.5 %
Since inception (on annual basis) i -2.5 %
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

Maturity profile (2018-11-30)

27.8 %
7-10 year
20.1 %
3-5 year
18.6 %
5-7 year
17.3 %
0-3 year
15.9 %
> 10 year
0.3 %
Other
Totaal
100 %

Sector allocation (2018-11-30)

33.0 %
Sovereign bonds
20.9 %
Banks
9.6 %
Consumer Goods & Services
6.2 %
Other
5.5 %
Industry
4.8 %
Telecom & Technology
4.8 %
Utilities
3.5 %
Financial Services & Real estate
3.2 %
Insurance
2.8 %
Supranational
2.2 %
Basic Materials
1.6 %
Energy
1.2 %
Health Care
0.5 %
Asset Backed Securities
Totaal
100 %

Rating allocation (2018-11-30)

9.5 %
AAA
10.9 %
AA
28.3 %
A
28.0 %
BBB
16.1 %
BB
1.2 %
B
6.0 %
Not Rated
0.0 %
Other
Totaal
100 %

Top 10 holdings (2018-11-30)

2.7 %
0.700% Italie 2015-20
2.5 %
1.850% Frankrijk I/L 2011-27
2.1 %
1.500% Temasek 2016-28
2.1 %
0.800% Belgie 2018-28
2.1 %
1.750% Chili 2016-26
2.1 %
1.125% Corp Andina de Fomento 2018-25
1.8 %
1.750% Nederland 2013-23
1.7 %
1.250% Belgie 2018-33
1.4 %
2.125% Portugal 2018-28
1.4 %
1.125% Polen 2018-26
Totaal
19.8 %

Ongoing charges

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Management fee i
0.34 %
Service fee i
0.10 %
Taxe d'abonnement i
0.05 %
Indirect costs i
0.05%-0.10% (estimated range)
Expected ongoing charges i
0.54% - 0.59% (estimated bandwith)

Other costs

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Upward swing factor i
0.10 %
Downward swing factor i
0.10 %

Share class details

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Share class
LR
Investor type
Private
Distributing
No
Duration hedged
No
Investment category
Multi Asset Strategies
Inception date
2017-12-21
Domicile
Luxembourg
May be offered to all investors 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.
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
LU1626447426

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.