Kempen European High Dividend Fund N.V. - Class X

Profile

Kempen European High Dividend Fund N.V. (KEHDF) offers a diversified portfolio of European listed companies with an above-average dividend yield at the time the company purchased for the first time. KEHDF invests in companies that are listed or do business in geographical Europe including Eastern Europe and Russia. The portfolio contains around 40 investments, which are approximately equally weighted. The environmental, social and governance (ESG) criteria are incorporated in the investment process.

KEHDF primarily aims to generate a better long-term total return than the MSCI Europe Total Return Index (net dividends reinvested), comprising capital gains plus net dividends. This index consists of about 500 companies in 15 countries.

KEHDF pays its dividend on a quarterly basis and aims to pay all the received net dividends to the shareholders. Share class X will only be available for distributors who submit orders on behalf of their clients, and who have been selected by the management company.

Management team

Joris Franssen, Luc Plouvier, Marius Bakker, Robert van den Barselaar, Reineke Davidsz, Roderick van Zuylen

Performance per 2022-07-31 (rebased)

No chart data available

Performance per 2022-07-31

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  Fund Benchmark
1 month 3.4 % 7.6 %
3 months -3.4 % -1.5 %
This year -5.6 % -7.3 %
2019 18.1 % 26.0 %
2020 -10.7 % -3.3 %
2021 24.7 % 25.1 %
1 year (on annual basis) 3.0 % -1.3 %
3 years (on annual basis) i 4.1 % 6.6 %
5 years (on annual basis) i 3.6 % 5.6 %
Since inception (on annual basis) i 1.9 % 2.2 %
The results shown of the periods before 7 September 2016, the inception date of Kempen European High Dividend Fund N.V. class X, are those of Kempen European High Dividend Fund N.V. class N. 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. The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 211.98 M 2022-07-31
Share class size
EUR 23.45 M 2022-07-31
Number of shares
3,434,116 2022-07-31
Net Asset Value i
EUR 6.76 2022-08-16
Transaction price i
EUR 6.78 2022-08-16
Morningstar rating â„¢
Morningstar Analyst rating
Neutral

Fund characteristics per 2022-07-31

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  Fund Benchmark
Number of holdings 47 428
Dividend yield i 5.28 % 3.16 %
Weighted average market capitalization i EUR 50,230 M EUR 88,860 M
P/E ratio i 8.43
Active share i 85.14 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Developments per 2022-07-31

July was a very strong month for equities. The positive sentiment was driven by supportive Fed comments and on average better-than-feared company results. The Federal Reserve raised the benchmark interest rate again in July. Investors were positively surprised by the accompanying Fed comments, because the Fed indicated that the pace of hikes might slow later this year. The message is that the pace of monetary policy tightening may slow, and this positive message drove up equity markets. Another driver for markets in July was the start of earnings season. Although many companies have not reported results yet, the companies that have done so have reported earnings that were not as bad as feared. Also, company outlooks were generally more optimistic than investors had expected. Within this positive environment, KEHDF underperformed the broader market.

The sector that contributed most to the absolute performance was the consumer discretionary sector, which benefited from investor sentiment that is becoming somewhat less negative. Newly acquired Autoliv, BMW and Taylor Wimpey showed strong returns over July. The sector that detracted most from the absolute performance of KEHDF was the communication services sector. Strong performance of advertising agency WPP were more the offset by weak performance of Telenet and Telefonica.

One of the largest contributors was Equinor (+13% in July). The Norwegian energy company reported business results in July. The most important news was that the company will use more of its cash flows to reward shareholders. Equinor announced a share buyback of 6 billion USD. It also raised its dividend, which will mean a quarterly dividend of 2.2 B USD. With a market value of around 100 billion USD, the cash returns are substantial. Despite the strong price performance in July, the shares trade at just 7 times expected 2023 earnings.

One of the detractors from performance was Telenet (declining 21%). Telenet is the largest cable operator in Belgium. It offers cable TV, broadband, fixed and mobile telephony. A spectrum auction produced the worst possible outcome for the three incumbent telco’s, with Digi about to enter the b2c market as a fourth operator. This makes it harder for Telenet to increase prices. It will also have to invest more into its network to keep up with competitors. Although some of the investments will be funded by others (e.g. a JV with Fluvius) and the sale of the tower business, the company lowered its minimum dividend per share to 1 EUR per share. These negative developments have resulted in a declining share price in July.

In July, we acquired shares in Autoliv. Autoliv is the world market leader in passive automotive safety products. The company derives 65% of its revenues from airbags and steering wheels, and another 35% of the revenues are derived from seatbelts. Automobile manufacturers want to maintain their reputation for making safe cars. That is why they are willing to pay somewhat more for a proven, best-in-class airbag or seatbelt from Autoliv. As a result of higher market share, the company has been able to invest more into research and development, which allowed Autoliv to widen the product quality difference versus their competitors. Not only does this lead to substantial market share gains, it also allows Autoliv to make higher than average profit margins. Over the next few years, we believe that the company will be able benefit from a strong recovery in the automobile market. Automobile makers have not kept up with demand, because of covid-related supply chain issues. When these issues are resolved, a strong uplift for automobiles will drive a strong uplift in demand for Autoliv’s safety products. At the current price, the shares trade at a 3% dividend yield. If the earnings of Autoliv continue to grow as expected, we believe that the shares are substantially undervalued.

The purchase of Autoliv was financed by selling our shares in French auto parts manufacturer Valeo. Just like Autoliv, Valeo may benefit from an upswing in the global automobile market. However, the competitive positioning of Valeo is less favourable than Autoliv’s. This is because Valeo sells products that are perceived as being less important than seatbelts and airbags. Examples are clutches, lighting, and windshield wipers. In a tough competitive environment, it is difficult to gain market share and to improve margins. Despite the differences in quality, Valeo has a lower dividend yield than Autoliv. After close study, we switched from Valeo into Autoliv.

We currently expect a dividend yield of around 5.7% for KEHDF. This number is based on the consensus estimate of dividends paid out over the next 12 months. KEHDF still trades at a strong discount versus the market (the average valuation of all the holdings in KEHDF versus the broader equity market). Historically, this has led to a strong relative performance in the medium term. Also, the absolute valuation of the strategy is compelling. We continue to focus on attractively valued companies, that have good capital discipline and generate positive cash flows through the cycle. In summary, the current environment offers the opportunity to buy a well-diversified portfolio with solid earnings power at an attractive valuation. In addition, ESG (Environmental, Social and Governance) is fully incorporated in our investment process.

Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2022-07-31 (rebased)

No chart data available

Performance per 2022-07-31

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  Fund Benchmark
1 month 3.4 % 7.6 %
3 months -3.4 % -1.5 %
This year -5.6 % -7.3 %
2019 18.1 % 26.0 %
2020 -10.7 % -3.3 %
2021 24.7 % 25.1 %
1 year (on annual basis) 3.0 % -1.3 %
3 years (on annual basis) i 4.1 % 6.6 %
5 years (on annual basis) i 3.6 % 5.6 %
Since inception (on annual basis) i 1.9 % 2.2 %
The results shown of the periods before 7 September 2016, the inception date of Kempen European High Dividend Fund N.V. class X, are those of Kempen European High Dividend Fund N.V. class N. 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. The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.

Dividends

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Distributing
Yes
Last dividend
EUR 0.08
Ex-date last dividend
2022-05-27
Number of distributions per year
4
Dividend calendar
The dividend distribution of KEHDF (ex-date 01-08-2018) is included in the NAV per 31 July 2018 and is therefore included in the performance figures of July.

Risk analysis (ex post) per 2022-07-31

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  3 years Since inception
Maximum drawdown i -29.33 % -38.92 %
Tracking error i 7.28 % 3.85 %
Information ratio i -0.35 -0.07
Beta i 1.09 0.96
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Top 5 contribution (2022-07-31)

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  Contribution i Performance i
Equinor 0.42 % 12.87 %
Autoliv 0.35 % 13.12 %
Taylor Wimpey 0.31 % 11.94 %
RELX 0.30 % 12.04 %
Reckitt Benckiser 0.29 % 10.67 %

Bottom 5 contribution (2022-07-31)

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  Contribution i Performance i
Telenet Group -0.41 % -21.20 %
Repsol -0.34 % -11.46 %
Fresenius -0.32 % -13.67 %
Telefonica -0.28 % -10.39 %
Admiral -0.27 % -12.19 %

Geographic allocation (2022-07-31)

29.1 %
United Kingdom
16.9 %
France
11.7 %
Germany
8.7 %
Netherlands
4.7 %
Spain
3.9 %
Belgium
3.6 %
Sweden
3.6 %
Switzerland
3.5 %
Norway
14.1 %
Other
Total
100 %

Top 10 holdings (2022-07-31)

3.5 %
Equinor
2.9 %
Autoliv
2.9 %
Reckitt Benckiser
2.7 %
Unilever PLC
2.7 %
Taylor Wimpey
2.7 %
National Grid
2.7 %
Shell
2.7 %
ING Groep
2.7 %
Deutsche Post
2.7 %
ALD
Total
28.3 %

Sector allocation (2022-07-31)

24.4 %
Financials
13.2 %
Energy
11.4 %
Telecommunications
10.2 %
Consumer Discretionary
10.0 %
Industrials
9.9 %
Consumer Staples
8.7 %
Health Care
6.1 %
Utilities
4.3 %
Basic Materials
1.8 %
Other
Total
100 %
The cash position is included in ‘Other’.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Environmental and/or social characteristics promoted

The Kempen European High Dividend Fund (the “Fund”) falls under the scope of article 8 of the SFDR which means that the fund promotes environmental and/or social characteristics. This fund will invest in a broad range of companies, of which some will have sustainability objectives.

We commit to the goals of the Paris Agreement. This encompasses short-term objectives (2025), a mid-term ambition (2030) and a long-term commitment to be a net zero investor by 2050. By 2025, we aim to be aligned with a path to achieving the Paris Agreement and Dutch Klimaatakkoord. We follow the market reduction, which assumes a pathway in line with the EU Benchmarks.

Fund carbon emission targets

ESG Investment process

The promotion of environmental and/or social characteristics is achieved through the consistent implementation of the funds ESG policy. The ESG policy is fully implemented in our strategy’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership.

In the investment process we assess the ESG profile of a company. We look at 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. This includes an assessment of good governance practices. The investee companies are rated for governance aspects using external research as well as making internal assessments. Furthermore, we look into the company’s exposure to past controversies and future ESG opportunities. Based on the fundamental ESG analysis we form an opinion on the quality of a company’s ESG profile.

Exclusion

The Fund applies exclusion criteria. These take into account international standards, such as UN Global Compact Framework, the OECD Guidelines for Multinational Enterprises, UN Guiding Principles for Business and Human Rights, and our Principles for Responsible Investment commitments. The Fund applies additional exclusion criteria based on product involvement and business conduct.

Key figures

  Kempen criteria Additional criteria
Business conduct
Human Rights
Labour
Environment
Anti Corruption
Product involvement
Controversial Weapons
Tobacco
Thermal Coal
Tar Sands
Adult Entertainment
Alcohol
Animal Welfare & GMO
Gambling
Power Generation Nuclear
Power Generation Carbon Intensive
(Un)conventional Oil & Gas Extraction
Weaponry
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.400 %
Service fee i
0.15 %
Expected ongoing charges i
0.55 %
Ongoing charges last financial year i
0.60 %
The ongoing charges figure of the last financial year relates to 2020/2021.

The service fee is determined annually on basis of the net asset value as of the last day of the previous financial year:
< or equal to EUR 200 million: 0.20%
Between EUR 200 million and EUR 700 million: 0.15%
>EUR 700 million: 0.10%

Performance fee

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Potential performance fee
0 % - 0.20 %
Current performance fee
0 % per July 2022
Performance fee last financial year
0.00 %
The level of the performance fee is determined on a montly basis, based on the performance relative to the benchmark and does not exceed 0,20%.

Please note that a performance fee is charged in case when the fund has positive return, which is more than the benchmark, but also when the fund has a negative return, which is less negative than the benchmark.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Share class
X
Investor type
Institutional & Private
Distributing
Yes
Benchmark i
MSCI Europe Total Return Index (calculated in Euro)
Investment category
High Dividend Equity
Universum
European equities
Inception date
2016-09-06
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Administrator
BNP Paribas Securities Services S.C.A., Amsterdam branch
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A., Amsterdam branch
Morningstar rating â„¢
Morningstar Analyst rating
Neutral

Tradability

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Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
NL0011843164
Details
Orders must be submitted via Vestima.
Class X of Kempen European High Dividend Fund N.V. will only be available for orders submitted via the Vestima platform. Share class X will only be available for distributors who submit orders on behalf of their clients, and who have been selected by the management company.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management N.V. (KCM) is the management company of Kempen European High Dividend Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.