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 2021-09-30 (rebased)

No chart data available

Performance per 2021-09-30

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  Fund Benchmark
1 month -5.0 % -4.4 %
3 months 3.4 % 2.5 %
This year 21.3 % 18.4 %
2018 -19.0 % -15.9 %
2019 27.9 % 31.4 %
2020 -0.6 % 4.6 %
1 year (on annual basis) 37.0 % 38.0 %
3 years (on annual basis) i 9.1 % 10.8 %
5 years (on annual basis) i 6.6 % 11.0 %
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 127.09 M 2021-09-30
Share class size
EUR 0.73 M 2021-09-30
Number of shares
21,311 2021-09-30
Net Asset Value i
EUR 35.22 2021-10-22
Turnover rate
55.71 %
Morningstar rating â„¢

Fund characteristics per 2021-09-30

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  Fund Benchmark
Number of holdings 46 1018
Dividend yield i 2.26 % 1.73 %
Weighted average market capitalization i EUR 3,316 M EUR 3,516 M
P/E ratio i 15.09
Active share i 92.71 %
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 60, avenue J.F. Kennedy, L-1855, 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 2021-09-30

In September the Fund (I-class) decreased by 4.9% (net of fees) while the MSCI Europe Small-cap index decreased by 4.4%.

Despite rising inflation, higher interest rates and high profit expectations equity markets climbed the 'wall of worry' until August without major problems. In September, new uncertainties caused global stock markets to take a step back. On the one hand, the financial turmoil of the Chinese real estate conglomerate Evergrande caused a shock wave through the financial markets, but so far the risk of contagion appears limited. On the other hand, an unbalanced situation in the energy markets with sharp rises in (gas) prices and an unstable energy supply in China is creating new uncertainties. The message from central banks remains largely unchanged with interest rate increases in the long term and a further reduction of monthly bond purchases while US politicians are debating an increase of the country’s debt ceiling.

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 continuing upward trend 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.

During the month Premier Foods was added to the portfolio while no holdings were entirely sold.

In September Bawag, Subsea and El.En delivered the strongest contribution to the portfolio. In an upbeat capital markets day Bawag (+8.2%) announced slightly higher than expected medium term targets which translate into an average 10% EPS growth for 2020-2025 and also includes returning a significant amount of cash to shareholders by a combination of dividends and share buybacks. Subsea (+16.7%) shares recovered somewhat after reporting disappointing results earlier in the year. The recovery was helped by a rising oil price and the award of a major project, with a contract value over $750 million. We believe that the Subsea7 orderbook for the years 2023 and 2024 is building up nicely, which will ultimately result in a tighter market, with higher utilization- and day rates for the Subsea7 vessels. With an orderbook of almost $7 billion the company has almost two years of work at hand. El.En (+8.2%) raised its guidance for FY21 again. With growth in the first half of 46% for the medical division and 105% for the industrial division, both outperformed the already elevated expectations. As the company ended the quarter with a record orderbook, El.En raised its guidance again for FY21 to more than €550 million revenues, versus previous expectations of €500 million. With a well filled innovation pipeline and some activities still negatively impacted by COVID-19, we believe El.En’s long term prospects remain very attractive. Yet, we have slightly reduced our position as the share price has doubled so far this year.

The companies with the worst contribution to the portfolio in September were Coats, Vesuvius and Huhtamaki. Coats Group shares dropped (-11.8%), as their most profitable country, Vietnam, continued to be in lock down. We have seen the impact from this lock down at Nike, a customer of Coats, where sales growth slowed down due to supply chain issues. Although we believe that the issues are temporary, the extended lock downs poses a risk for Coats with respect to meeting its full year guidance. As mentioned above, a lot is happening in global supply chains currently. While steel producers might still benefit more from higher prices than increased volumes, the latter is what is important for the revenues of Vesuvius (-13.3%). Investors seem to be worried about steel production volumes which affect the demand for Vesuvius’ products and services. While demand might be impacted negatively in the short term, we believe that Vesuvius is well positioned to benefit from a longer-term increased demand for its products and services which among other things help its clients reduce their CO2 footprint. During the month we engaged with Vesuvius on exactly this topic which will not only be a moral but also a regulatory tailwind for the company’s long term revenues. As a packaging company Huhtamaki’s (-12.7%) near term earnings are sensitive to cost inflation and the shares’ weak performance in September reflects investors’ concerns around a weak earnings performance in Q3 as pulp and paper as well as plastic has risen sharply in price over recent weeks and months.

ESG commentary
This month we spoke with Vesuvius’ head of sustainability to get a better understanding of the target setting and company strategy with respect to CO2 emissions. Vesuvius is one of the highest CO2 emitters in the portfolio. In our view, the company is moving in the right direction with a clear roadmap. Interestingly, Vesuvius’ annual emissions are roughly equivalent to what their client industry emits in an hour. So, while we clearly find it important that Vesuvius addresses its own footprint, we see a much larger opportunity for the company and the planet to reduce its clients emissions which should not only reduce climate change but also drive financial returns. That is what we call a real win-win situation.

The Fund has a CO2 revenue intensity that continues to be significantly below the benchmark. Furthermore, the portfolio is on course towards achieving its net-zero emissions climate objective aligned with the Paris Agreement, Dutch Klimaatakkoord and the EU Climate Transition Benchmark in line with the 1.5°C scenarios from the IPCC in 2050 and our intermediate target set for 2025. While details of the EU SFDR regulation are still developing, the Fund falls in the article 9 category of the EU SFDR due to its net-zero emission climate objective. Furthermore, the Fund’s strict exclusion criteria for controversial activities, ESG integration in the investment process and active ownership including engagement result in a better Morningstar Sustainability Rating than close to 90% of its peers.

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 60, avenue J.F. Kennedy, L-1855, 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 2021-09-30 (rebased)

No chart data available

Performance per 2021-09-30

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  Fund Benchmark
1 month -5.0 % -4.4 %
3 months 3.4 % 2.5 %
This year 21.3 % 18.4 %
2018 -19.0 % -15.9 %
2019 27.9 % 31.4 %
2020 -0.6 % 4.6 %
1 year (on annual basis) 37.0 % 38.0 %
3 years (on annual basis) i 9.1 % 10.8 %
5 years (on annual basis) i 6.6 % 11.0 %
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 2021-09-30

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  3 years Since inception
Maximum drawdown i -30.51 % -62.09 %
Tracking error i 4.69 % 5.08 %
Information ratio i -0.35 0.03
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 60, avenue J.F. Kennedy, L-1855, 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 (2021-09-30)

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  Contribution i Performance i
Dialog Semiconductor 1.95 % 0.00 %
BAWAG Group 0.27 % 8.16 %
Subsea 7 SA 0.21 % 16.70 %
El. En. 0.19 % 8.23 %
Arcadis 0.08 % 2.86 %
Percentages shown for contributions and performances are based on Euros.

Bottom 5 contribution (2021-09-30)

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  Contribution i Performance i
Coats -0.33 % -11.81 %
Vesuvius -0.33 % -13.34 %
Huhtamaki -0.30 % -12.72 %
Asos -0.30 % -22.44 %
Tag Immobilien -0.29 % -11.74 %
Percentages shown for contributions and performances are based on Euros.

Geographic allocation (2021-09-30)

30.0 %
United Kingdom
14.1 %
Netherlands
10.1 %
Germany
9.0 %
Belgium
6.1 %
France
6.0 %
Sweden
5.8 %
Luxembourg
3.5 %
Austria
2.9 %
Cash
2.2 %
Finland
2.2 %
Spain
2.0 %
Italy
1.9 %
Switzerland
1.9 %
Ireland
0.8 %
Norway
1.7 %
Other
Total
100 %

Top 10 holdings (2021-09-30)

3.5 %
BAWAG Group
3.4 %
ASR Nederland
3.2 %
Bunzl
3.1 %
Tate & Lyle
3.1 %
Software
3.0 %
Ipsos
2.9 %
Signify
2.9 %
Cloetta AB
2.9 %
Telenet Group
2.7 %
Befesa
Total
30.8 %

Sector allocation (2021-09-30)

22.0 %
Industrials
12.0 %
Financials
11.3 %
Consumer Discretionary
10.0 %
Health Care
9.8 %
Real estate
8.2 %
Consumer Staples
7.6 %
Technology
7.4 %
Telecommunications
6.2 %
Basic Materials
5.6 %
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 60, avenue J.F. Kennedy, L-1855, 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 60, avenue J.F. Kennedy, L-1855, 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
Administrator
BNP Paribas Securities Services S.C.A., Luxembourg branch
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A., Luxembourg branch
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 60, avenue J.F. Kennedy, L-1855, 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 60, avenue J.F. Kennedy, L-1855, 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.

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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 60, avenue J.F. Kennedy, L-1855, 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.