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 2018-09-30 (rebased)

No chart data available

Performance per 2018-09-30

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  Fund
1 month 0.3 %
3 months 0.3 %
This year -1.5 %
2017 -0.0 %
Since inception (on annual basis) i -1.5 %
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 71.24 M 2018-09-30
Share class size
EUR 1.78 M 2018-09-30
Number of shares
72,219 2018-09-30
Net Asset Value i
EUR 24.56 2018-10-23

Fund characteristics per 2018-09-30

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  Fund
Number of holdings 680

Market developments per 2018-09-30

German 10-year government bond yields closed September at 0.47%, an increase of 17 basis points compared to the end of August. In September, the spread on the index for investment grade corporate bonds tightened by 5 basis points to 130 basis points above the government bond curve. The index earned an absolute return of -0.29%. The spread on the High Yield (BB) index tightened by 1 basis point, yielding an absolute return of 0.35%.

September was a positive month for the financial markets, in spite of persisting concerns about the economic impact of a potential hard Brexit, the burgeoning trade wars between the US and its main trade partners and uncertainty about the budgetary discipline of Italy’s new government.

At the end of September, the Italian government announced its budget for 2019. The market was hoping for a deficit of less than 2%, but the government said it expected the budget deficit to be 2.4% over the next three years. This is also substantially higher than the 1.6% agreed with the EU for 2019. On 15 October, the budget needs to be submitted to the European Commission, after which it will issue an opinion at the end of November. This will not be positive, given the remarks on publication of the budget plans. There is also a high risk of Italy’s credit rating being downgraded in the short term in response to the budget plans. Both Moody’s and S&P have scheduled rating reviews for the end of October.

Subordinated bonds issued by those companies that should profit most from higher interest rates, banks and insurance companies, performed very well. In spite of the umpteenth profit warning of the past few months from a major player in the auto sector (BMW this time), bonds issued by auto sector companies also performed above average in September. This also applied to bonds issued by companies operating in other cyclical sectors, including construction materials, materials and oil & gas. September also saw a small recovery in spreads on bonds issued by companies with an above-average dependence on emerging markets.

The dispersion within the general high yield market increased sharply in September. The prices of bonds issued by several companies with a B rating or lower dropped considerably. Corporate bonds with a BB rating, i.e. higher-quality bonds, displayed significantly better results than those issued by companies with lower ratings. Furthermore, the trend of outflow from the high yield market seems to have come to an end. Higher effective yields and spreads are apparently again tempting investors back into the asset class.

Portfolio developments per 2018-09-30

September was a positive month for the Kempen Income Fund. The portfolio earned a return of 0.29%. The differences in yield versus Germany tightened for Eurozone countries in September. The spread on Italian government bonds tightened particularly sharply, in spite of the turmoil in Italy at the end of the month. Other peripheral EU country spreads also tightened but by a smaller amount. This led to a positive contribution of 19 basis points. The fund’s exposure to Investment Grade corporate bonds and High Yield bonds accounted for a positive contribution of 13 bps. In addition, the currencies in Norway and Sweden performed well, causing our positions in these countries to add 5 basis points to the performance.

At individual company level, positive contributions came from the overweights in Telefonica, FiatChrysler, Schaeffler, Smurfit Kappa, CaixaBank, Bayer, EDF and Volkswagen, as well as the underweights in Salini Impreglio and Jaguar Land Rover. In contrast, the overweights in Casino, Orano, Adler, RWE Dea, Tank & Rast, Iliad, Deutsche Bahn and Danske Bank, as well as the underweight in Generali, contributed negatively.

Performance per 2018-09-30 (rebased)

No chart data available

Performance per 2018-09-30

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  Fund
1 month 0.3 %
3 months 0.3 %
This year -1.5 %
2017 -0.0 %
Since inception (on annual basis) i -1.5 %
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 (2018-09-30)

26.2 %
7-10 year
22.3 %
0-3 year
18.5 %
5-7 year
17.8 %
3-5 year
13.5 %
> 10 year
1.6 %
Cash
0.1 %
Other
Totaal
100 %

Sector allocation (2018-09-30)

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 (2018-09-30)

13.2 %
AAA
11.0 %
AA
27.9 %
A
24.5 %
BBB
15.3 %
BB
1.4 %
B
0.0 %
less than or equal to CCC
5.2 %
Not Rated
1.6 %
Cash
Totaal
100 %

Top 10 holdings (2018-09-30)

2.7 %
1.150% Spanje 2015-20
2.7 %
0.700% Italie 2015-20
2.2 %
1.750% Nederland 2013-23
2.2 %
0.250% Nederland 2014-20
2.2 %
1.750% Chili 2016-26
2.2 %
1.500% Temasek Financial 2016-28
2.1 %
1.125% Corp Andina de Fomento 2018-25
1.8 %
1.250% Belgie 2018-33
1.5 %
0.800% Belgie 2018-28
1.4 %
2.375% Cyprus 2018-28
Totaal
21.0 %

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.