As of 10 September 2019 Kempen (Lux) European Small-cap Fund is incorporated into Kempen (Lux) Sustainable European Small-cap Fund. Read the official announcement here.

Kempen Lux Sustainable European Small-Cap Fund - Class A

Profile

Kempen (Lux) Sustainable European Small-cap fund (the Fund) offers Investors the opportunity to invest in an actively and professionally managed portfolio of smaller listed European companies, while at the same time complying with strict exclusion and sustainability criteria. These are defined as companies with a maximum market capitalisation at the time of initial purchase of either EUR 5 billion, or the highest market capitalisation of any company included in the MSCI Europe Small Cap Total Return Index, whichever is the greater. The strategy primarily aims to generate a better long-term return than the benchmark.

The portfolio construction process involves a disciplined end to end framework initially utilizing proprietary in-house stock filters screening for high quality and attractively valued stocks. Thereafter,
fundamental in-house research is carried out to identify high conviction investment ideas. The end result is a portfolio of 30-50 stocks, well diversified across all regions and sectors.

On 10 September 2019 Kempen (Lux) European Small-cap Fund was incorporated into Kempen (Lux) Sustainable Small-cap Fund. You can find more information under the Documents tab.

 

Management team

Michiel van Dijk, Erwin Dut, Sander van Oort; Ingmar Schaefer

Performance per 2021-06-30 (rebased)

No chart data available

Performance per 2021-06-30

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  Fund Benchmark
1 month 0.6 % -0.5 %
3 months 6.6 % 5.3 %
This year 17.3 % 15.5 %
2018 -19.0 % -15.9 %
2019 27.9 % 31.4 %
2020 -0.6 % 4.6 %
1 year (on annual basis) 39.3 % 43.1 %
3 years (on annual basis) i 7.4 % 9.4 %
5 years (on annual basis) i 7.5 % 12.3 %
Since inception (on annual basis) i 10.8 % 10.7 %
Until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 127.11 M 2021-06-30
Share class size
EUR 0.76 M 2021-06-30
Number of shares
23,074 2021-06-30
Net Asset Value i
EUR 34.28 2021-07-27
Turnover rate
55.71 %
Morningstar rating â„¢

Fund characteristics per 2021-06-30

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  Fund Benchmark
Number of holdings 46 1027
Dividend yield i 2.29 % 1.73 %
Weighted average market capitalization i EUR 3,175 M EUR 3,322 M
P/E ratio i 16.06
Active share i 92.46 %
Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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.

Developments per 2021-06-30

In June the Fund (I-class) increased by 0.7% (net of fees) while the MSCI Europe Small-cap Index declined by 0.5%.

After five consecutive months of positive momentum in global stock markets, markets were broadly flat in June. On the one hand, company specific news-flow was light just ahead of the half-year results season. On the other hand, the surge of the COVID delta variant in several countries triggered renewed uncertainty about the economic recovery scenario. Also statements by the US central bank (FED) that it will raise interest rates a year earlier than expected are negative for the stock market. The reduced appetite from investors was also reflected in the withdrawal of a number of planned IPOs following a flurry of IPOs earlier this year. The first companies will publish their half-year figures by mid-July. Favourable macroeconomic data in 1H21 and well-filled order books give companies a solid foundation for growth. However, the real test in 1H21 concerns the ability of companies to pass on cost inflation and thus secure their margins.

During the month no new names were added to the portfolio and we entirely sold our positions in Brenntag and TGS. Due to the ongoing roll out of COVID-19 vaccination programmes, the scenario of normalization of global economies in the course of FY21 looks increasingly likely. The recent positive trend in daily statistics on new COVID-19 infections and hospitalization rates show early signs that the pandemic is in control in most developed countries but the surge of the new delta variant may pose a new threat especially for countries where the vaccination rate is low. Although medium term prospects are encouraging, short term challenges remain. Financial markets can therefore remain volatile, especially as hurdles like availability of the vaccine, logistical challenges and significant input cost inflation determine the speed and shape of the recovery. Despite the recent strong move in stock markets we still see attractive long-term potential for our portfolio holdings but remain focused on near-term earnings risks and balance sheet strength. As flagged earlier we continue to focus on the margin of safety in our valuations.

In June Befesa, Beazley and Ipsos delivered the strongest contribution to the portfolio. Befesa (+10.6%) shares benefited from the highly attractive acquisition of American Zinc Recycling for $450m at 6x EBITDA post targeted synergies. Befesa’s recycling capacity will increase by 60% as the acquisition cements Befesa’s position as the number one global steel dust recycler. Beazley (+10.9%) shares rebounded without company specific news flow. We see the share price move as a delayed response to the reassuring 1Q21 trading update. Also confirmation that the Olympic Games in Japan will proceed, albeit with only local spectators, reduces the likelihood of further significant event cancellation claims for Beazley in 2H21. Shares of Ipsos traded 6.1% higher for the month, without any news. At the first quarter results the company already flagged that the current year will show record revenues. We do not rule out that Ipsos is in a kind of goldilocks scenario where they will benefit from the return of private customers, while public customers continue to require insights around their management of the epidemic. We approach this scenario with caution, but a valuation of 11x earnings combined with an unlevered balance sheet which can be used for bolt-on acquisitions and share buy backs, we feel that this scenario is not reflected in the current share price.

The companies with the worst contribution to the portfolio in June were Jost Werke, ASR and Vesuvius. Jost Werke shares were lower (-8.7%) for no particular reason. We expect the global truck and trailer cycle to remain strong and for the company to be able to defend its short term profit margins in the wake of higher steel prices. ASR (-7.4%) shares were weak without company specific news. In June the Netherlands was confronted with some local heavy rainfall and storms which caused quite some damage (estimated €37m). As ASR’s P&C business benefited from COVID in 1H20 given lower burglaries and car damage the gradual opening of economies and adverse weather conditions may cause the combined ratio to have normalized/deteriorated in 1H21. In the absence of relevant news, the share price of Vesuvius (-6.0%) declined in June offsetting the stronger share price development that we saw in May on the back of an upgrade of the company’s guidance for the full year.

ESG commentary
In June we engaged with several pharmaceutical companies on their approach to climate change and carbon emission reporting. While companies in this sector typically have a much lower carbon footprint when compared to companies in other industries, CO2 emissions are of increasing importance to the public eye, shareholders, regulators and other stakeholders. We spoke with Fagron on the challenges of carbon emission target setting as the company is embarking on a journey to improve its carbon emission monitoring system and reporting. Fagron is also looking to develop longer-term targets, beyond its 2025 ambition. Furthermore, we spoke with Alliance Pharma that is investigating Scope 3 emission monitoring and reporting. Scope 3 also includes the outsourced manufacturing activities that the company may have less control over, which significantly increases complexity.

Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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 2021-06-30 (rebased)

No chart data available

Performance per 2021-06-30

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  Fund Benchmark
1 month 0.6 % -0.5 %
3 months 6.6 % 5.3 %
This year 17.3 % 15.5 %
2018 -19.0 % -15.9 %
2019 27.9 % 31.4 %
2020 -0.6 % 4.6 %
1 year (on annual basis) 39.3 % 43.1 %
3 years (on annual basis) i 7.4 % 9.4 %
5 years (on annual basis) i 7.5 % 12.3 %
Since inception (on annual basis) i 10.8 % 10.7 %
Until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
No

Risk analysis (ex post) per 2021-06-30

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  3 years Since inception
Maximum drawdown i -30.51 % -62.09 %
Tracking error i 4.75 % 5.10 %
Information ratio i -0.43 0.02
Beta i 1.03 0.99
Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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.

Top 5 contribution (2021-06-30)

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  Contribution i Performance i
Befesa 0.27 % 9.66 %
Beazley 0.22 % 10.85 %
Ipsos 0.18 % 6.09 %
Bunzl 0.15 % 4.79 %
Alten 0.12 % 10.82 %
Percentages shown for contributions and performances are based on Euros.

Bottom 5 contribution (2021-06-30)

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  Contribution i Performance i
JOST Werke -0.26 % -8.71 %
ASR Nederland -0.23 % -7.44 %
Vesuvius -0.16 % -5.95 %
Cloetta AB -0.15 % -5.51 %
Arcadis -0.08 % -3.31 %
Percentages shown for contributions and performances are based on Euros.

Geographic allocation (2021-06-30)

32.4 %
United Kingdom
13.2 %
Netherlands
11.2 %
Germany
7.9 %
Belgium
6.5 %
Sweden
5.9 %
Luxembourg
5.7 %
France
3.0 %
Austria
2.3 %
Finland
2.2 %
Italy
2.1 %
Ireland
2.0 %
Spain
1.5 %
Switzerland
1.3 %
Cash
0.8 %
Norway
2.0 %
Other
Total
100 %

Top 10 holdings (2021-06-30)

3.4 %
Tate & Lyle
3.3 %
Bunzl
3.1 %
Ipsos
3.0 %
Software
3.0 %
JOST Werke
3.0 %
BAWAG Group
3.0 %
ASR Nederland
2.9 %
Befesa
2.9 %
Cloetta AB
2.7 %
Coats
Total
30.4 %

Sector allocation (2021-06-30)

21.2 %
Industrial Goods & Services
10.3 %
Real Estate
8.4 %
Technology
8.3 %
Food & Beverage
7.4 %
Health Care
7.3 %
Construction & Materials
5.9 %
Retail
5.2 %
Insurance
5.0 %
Automobiles & Parts
4.4 %
Media
3.9 %
Telecommunications
3.8 %
Banks
2.4 %
Personal & Household Goods
2.2 %
Financial Services
1.6 %
Basic Resources
1.4 %
Oil & Gas
1.3 %
Other
Total
100 %
Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
1.500 %
Service fee i
0.20 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
1.75 %
Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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
A i
Investor type
Private
Distributing
No
Benchmark i
MSCI Europe Small Cap Total Return Index
Investment category
Small-caps
Universum
Sustainable European Small- & Mid-caps
Inception date
2015-04-21
Domicile
Luxembourg
May be offered to all investors in
Belgium, France, Italy, Luxembourg, Switzerland, The Netherlands, United Kingdom
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.
Morningstar rating â„¢

Tradability

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Minimum subscription
Initial subscription € 1
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0427934343
Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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.

Climate change

As a long-term investor, we believe climate change represents a systemic risk facing the economy, society and environment. We want to consider the risks and opportunities this presents to our investments in the coming decades. We have therefore set a long-term commitment (2050), a mid-term ambition (2030) and short-term objectives (2025).

  • 2050 commitment: Net-zero investor. Â
  • 2030 ambition: To align with a Paris Agreement pathway (listed and non-listed investments) and Dutch Klimaatakkoord.Â
  • 2025 objectives: To align with a pathway towards achieving the Paris Agreement (listed investments) and Dutch Klimaatakkoord goals.[1]

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The Kempen climate change policy can be found here (under climate change policy).

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[1]We use carbon intensity as a metric to come to the pathway of net-zero emissions. As we care about the direction of travel and reduction of carbon emissions in the economy, it might be that the actual reducing trend may deviate from the suggested average trend line. The pathway is derived from the pathway of the EU Benchmarks.

OUR FUND APPROACH TO RESPONSIBLE INVESTMENT

The investment objective of Kempen (Lux) Sustainable European Small-cap Fund is to offer investors the opportunity to invest in an actively and professionally managed portfolio of smaller listed European companies, while at the same time complying with strict exclusion and sustainability criteria.

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By 2025, we aim to align with a pathway towards achieving the Paris Agreement and Dutch Klimaatakkoord goals for our portfolio, as well as the EU Climate Transition Benchmark[2].

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Kempen’s ESG policy is implemented in our fund’s investment process by the following pillars: Exclusion, Integration and Active ownership.

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[2] The EU Benchmarks consists of two climate benchmarks, Climate Transition Benchmark and Paris Aligned Benchmark, which have the aim to reach net-zero emissions by 2050 - in line with the 1.5?C scenarios from the IPCC. As we care about the direction of travel and reduction of carbon emissions in the economy, it might be that the actual reducing trend may deviate from the average pathway. We use carbon intensity (based on Revenues) as the forward-looking climate metric.

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Exclusion & Avoidance

In line with the general Kempen policy, the European Sustainable Small-cap Fund excludes all companies on the KCM Exclusion- or Avoidance list.

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Companies that ‘Fail’ or are on ‘Watchlist’ marked against the criteria of the United Nations Global Compact are excluded.

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We determine a company’s ESG score (1-5) and exclude companies with a score of 1. Companies with a score of 2 are excluded on a comply or explain basis.

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The Sustainable European Small-cap Fund also excludes companies based on additional sustainability criteria as listed in the table below.

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More information on our exclusion criteria and thresholds can be found here.

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KEMPEN

CRITERIA

ADDITIONAL SUSTAINABILITY CRITERIA

Business Conduct

x     Human Rights

x     Labour

x     Environment

x     Anti-corruption

Product Involvement

x     Controversial Weapons

x     Tobacco

x     Thermal coal

x     Tar sands

x     Adult Entertainment

x     Alcohol

x     Animal Welfare & GMO

x     Gambling

x     Power Generation

       Nuclear

x     Power Generation

       Carbon Intensive

x     (Un)conventional Oil &

       Gas Extraction

x     Weaponry

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ESG integration

In the investment process we assess the ESG profile of a company. We assess each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, practices and disclosure.

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A lower score (1-5) requires a higher return as used in our Discounted Cash Flow (DCF) models. If ESG risks are deemed too severe, an investment in the company will be avoided and/or existing holdings will be sold.

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On a quarterly basis, the Kempen Responsible Investment team screens the holdings of the Kempen Sustainable European Small-cap Fund and discusses the findings with the portfolio managers.

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Active ownership: Engagement

As active investors we perform comprehensive engagements with our portfolio companies with the objective to unlock value and reduce risk.

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Our engagement process defines clear objectives of which the progress and result is tracked and well documented. If at any stage the company refuses to cooperate, divestment has to be considered.

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In the first half of 2019, we engaged with 13 companies on strategic, environmental, social and governance issues.

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Active ownership: Voting

Exercising our voting rights is also an essential part of our responsible investment philosophy. ISS provides us with voting recommendations based on our own voting and governance policy. Items are further analyzed on a case by case basis.

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Often, we inform the company about our voting intention ahead of the meeting and, where there is a recommendation to vote against management, we ask the company to clarify their viewpoints. After careful analysis, we form our own opinion and vote accordingly.

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Our full voting records are available here.

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Risks

For more information about the mid and long term risks associated with the investments:

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* Although Kempen Capital Management N.V.’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

ESG Report
Febelfin
Screening MSCI ESG Research
Screening MSCI ESG Research
UN global impact
ESG integration in the investment process
ESG integration in the investment process
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Kempen (Lux) Sustainable European Small-cap 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 Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). 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/en/asset-management). The information on the website is (partly) available in Dutch and English.

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.