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 2018-07-31 (rebased)

No chart data available

Performance per 2018-07-31

Slide to see more
  Fund
1 month 0.6 %
3 months -1.0 %
This year -1.2 %
2017 -0.0 %
Since inception (on annual basis) i -1.2 %
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

Slide to see more
Total fund size
EUR 70.61 M 2018-07-31
Share class size
EUR 1.78 M 2018-07-31
Number of shares
72,219 2018-07-31
Net Asset Value i
EUR 24.62 2018-08-14

Fund characteristics per 2018-07-31

Slide to see more
  Fund
Number of holdings 640

Market developments per 2018-07-31

German 10-year government bond yields closed July at 0.44%, an increase of 14 basis points compared to the end of June. In July, the spread on the index for investment grade corporate bonds tightened by 11 basis points to 125 basis points above the government bond curve. The index earned an absolute return of 0.28%. The spread on the High Yield (BB) index tightened by 33 basis points, resulting in an absolute return of 1.57%.

Bond markets experienced a significant movement on 20 July, prompted by speculation in the market that the Bank of Japan was considering a change to its monetary policy. This triggered the largest increase in Japanese bond yields of the past two years. It also pushed up yields in the rest of the world. The Bank of Japan was subsequently forced to spend a large amount buying bonds in order to prevent further increases. Ultimately, the Japanese central bank made few alterations to its monetary policy at the end of July. However, it did announce that it would be more flexible in its bond buying and that it would permit Japanese 10-year bond yields to move within a broader range.

The tightening of investment grade credit and high yield spreads in July was mainly driven by two factors. Firstly, corporate results over the second quarter were better than expected for US companies in particular. In addition to the recently implemented tax cuts, US companies continue to profit from the solid economic growth in the most important regions of the world. However, pointing to the uncertain impact on investments and trade of protectionist measures and a potentially fast-approaching hard Brexit, businesses are rather reluctant to extrapolate their recent performances over the remainder of 2018.

The second factor that helped to tighten spreads was the restricted number of corporate bonds issued in July, especially when taken into account the number of redemptions during the month. When combined with lower de-allocation from the investment grade credits asset class, and even inflow into high yield, this led to larger cash positions at institutional investors. Given this increase in cash and the underlying high yields, it was mainly insurers that bought long-term corporate bonds in July.

Portfolio developments per 2018-07-31

July was a positive month for the Kempen Income Fund. The portfolio earned a return of 0.59%. The differences in yields versus Germany shrank for all the Eurozone countries in July. In particular spreads on Spain, Slovenia and Portugal tightened, although spreads are currently nowhere near the lowest levels seen this year. Spreads on government-related paper also tightened, while spreads on Chile and Korea tightened by over 20 basis points. This all combined to generate a positive contribution of 22 basis points. The fund’s exposure to investment grade corporate bonds and high yield made a positive contribution of 30 bps.

At individual company level, positive contributions came from the overweights in K+S, Wind, Leonardo, Telefonica, NN Group, Volkswagen, EDF, OMV and Bayer, as well as the underweights in TDC, Nokia and Loxam. In contrast, the overweights in RWE Dea, Tank & Rast, TVO, CK Hutchison, Becton Dickinson and Christian Dior, as well as the underweights in Daimler, Generali and CNP Assurances, contributed negatively.

Performance per 2018-07-31 (rebased)

No chart data available

Performance per 2018-07-31

Slide to see more
  Fund
1 month 0.6 %
3 months -1.0 %
This year -1.2 %
2017 -0.0 %
Since inception (on annual basis) i -1.2 %
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

Slide to see more
Distributing
No

Maturity profile (2018-07-31)

26.7 %
7-10 year
19.0 %
5-7 year
18.8 %
3-5 year
17.1 %
0-3 year
15.8 %
> 10 year
2.5 %
Cash
0.0 %
Other
Totaal
100 %

Sector allocation (2018-07-31)

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 (2018-07-31)

10.9 %
AAA
9.0 %
AA
28.0 %
A
25.8 %
BBB
15.3 %
BB
1.9 %
B
0.0 %
less than or equal to CCC
6.7 %
Not Rated
2.5 %
Cash
0.0 %
Other
Totaal
100 %

Top 10 holdings (2018-07-31)

2.9 %
1.150% Spanje 2015-20
2.9 %
0.700% Italie 2015-20
2.5 %
1.750% Nederland 2013-23
2.3 %
1.125% Polen 2018-26
2.3 %
1.750% Chili 2016-26
2.2 %
1.500% Temasek Financial 2016-28
2.2 %
1.125% Corp Andina de Fomento 2018-25
1.9 %
1.250% Belgie 2018-33
1.8 %
0.350% Asian Development Bank 2018-25
1.3 %
0.125% Zweden 2018-23
Totaal
22.2 %

Ongoing charges

Slide to see more
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

Slide to see more
Upward swing factor i
0.10 %
Downward swing factor i
0.10 %

Share class details

Slide to see more
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

Slide to see more
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.