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 2019-03-31 (rebased)

No chart data available

Performance per 2019-03-31

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  Fund
1 month 0.3 %
3 months 1.3 %
This year 1.3 %
2017 -0.0 %
2018 -2.6 %
1 year (on annual basis) -0.9 %
Since inception (on annual basis) i -1.0 %
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 73.79 M 2019-03-31
Share class size
EUR 8.02 M 2019-03-31
Number of shares
325,516 2019-03-31
Net Asset Value i
EUR 24.80 2019-04-18

Fund characteristics per 2019-03-31

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  Fund
Number of holdings 697

Market developments per 2019-03-31

March was a positive month for fixed income markets. Spreads on corporate bonds tightened, while yields dropped sharply worldwide. German government bond yields even dipped below 0% for the first time since October 2016. The spread on the high yield index tightened by 7 basis points to 218 basis points above the swap curve; the spread on the iBoxx Euro Corporate Index tightened by 5 basis points to 140 basis points above the government bond curve. German 10-year government bond yields closed March at -0.07%, 25 basis points lower than at the end of February. The main reasons for these movements were signals from the Fed and the ECB that they are planning to ease monetary policy, but poorer economic data in the Eurozone did not help either.

At the start of March, the ECB announced that it would keep interest rates low for longer, at least until the end of 2019, and that it would launch a new TLTRO programme that allows banks to borrow from the central bank at very attractive rates. The new TLTROs will have a maturity of two years and be indexed against the ECB’s interest rate. This announcement came earlier than the market had expected and is a response to the ECB’s lower inflation and growth forecasts. The growth forecast for 2019 was even reduced from 1.7% to 1.1%. Economic indicators in the Eurozone have been worse than expected for several months now. The German PMI, which measures confidence in the German manufacturing sector, stood out in particular last month. It came at its lowest level for the past seven years.

The Fed surprised the market in March by making a significant adjustment to its dot plot at its meeting. This demonstrates that it no longer intends to raise interest rates again in 2019 and that it will cease balance sheet reduction as of September. The growth and inflation forecasts were also adjusted downwards slightly. Yield curves flattened in response to this, and the 3-month versus the 10-year curve even became negative. A negative yield curve is often a precursor of a recession.

Portfolio developments per 2019-03-31

The Kempen Income Fund noted a performance of 0.26% in March. The fund again profited greatly from the sharp tightening of spreads on corporate bonds. With the exception of Spain, there was a small tightening of spreads versus Germany for all the Eurozone countries. Spanish spreads widened by a few basis points at the end of the month after the country’s rating remained unchanged, while the market had hoped for an upgrade to the rating. The fund profited from its positions in Slovenia, Portugal, Ireland and Belgium. The underweight in France made a small negative contribution.

At individual company level, there were positive contributions from the overweights in Telecom Italia, DS Smith, Peugeot, Schaeffler, Leonardo, Medtronic, Atos, Sky, Partner Re and London Stock Exchange, as well as from the underweights in Saipem and Netflix. In contrast, the overweights in Huntsman Corporation, Smurfit Kappa and Adler, as well as the underweights in Wind, Salini Impreglio, Worldpay, Daimler and Banco Santander, contributed negatively to the return.

Performance per 2019-03-31 (rebased)

No chart data available

Performance per 2019-03-31

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  Fund
1 month 0.3 %
3 months 1.3 %
This year 1.3 %
2017 -0.0 %
2018 -2.6 %
1 year (on annual basis) -0.9 %
Since inception (on annual basis) i -1.0 %
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 (2019-03-31)

27.8 %
7-10 year
20.1 %
3-5 year
19.4 %
5-7 year
16.9 %
> 10 year
13.7 %
0-3 year
2.2 %
Cash
0.2 %
Other
Total
100 %

Sector allocation (2019-03-31)

36.0 %
Corporates
30.9 %
Government
19.1 %
Financials
11.3 %
Semi-Government
0.3 %
Asset-Backed Loans
0.2 %
Money Market Funds
0.0 %
Covered Bonds
2.2 %
Other
Total
100 %

Rating allocation (2019-03-31)

10.3 %
AAA
10.2 %
AA
27.2 %
A
24.9 %
BBB
15.1 %
BB
1.0 %
B
9.0 %
Not Rated
2.2 %
Cash
0.0 %
Other
Total
100 %

Top 10 holdings (2019-03-31)

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 %
0.500% Finland 2016-26
2.1 %
1.125% Corp Andina de Fomento 2018-25
1.5 %
0.800% Belgie 2018-28
1.5 %
0.000% Nederland 2017-24
1.4 %
1.950% Spanje 2016-26
1.4 %
1.000% Polen 2019-29
1.4 %
0.000% Italie 2018-19
Total
18.4 %

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.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.

Tradability

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Minimum subscription
Initial subscription: €1
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.