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Robeco high yield fund reaches maximum capacity

The firm saw accelerated inflows into the fund since the Covid-19 market correction in March.

Robeco is planning to close its High Yield Bonds strategy for new investments on 1 September this year, due to strong inflows, according to a statement from the firm.

Managed by Sander Bus, Roeland Moraal and Christiaan Lever, the high yield bonds capability has now reached its maximum, the statement said. Assets of the fund have reached ‎€11.2bn ($12.8bn), FE Fundinfo shows.

The fund is currently offered to accredited investors in Singapore and professional investors in Hong Kong. It is also available in Europe, according to FE Fundinfo.

“Since the Covid-19 market correction of March 2020, we have seen accelerated inflows into the asset class and Robeco’s fundamentally managed high yield strategy,” Bus said in the statement.

He noted that high yield is a capacity-constrained asset class, and managing a huge high yield strategy could impact its ability to generate outperformance.

“Closing the strategy will allow us to continue meeting our investment objectives and creating added value for our shareholders. The closure of the strategy will not affect the way the portfolios are managed,” he said.

The firm noted that it also offers quantitative high yield strategies, which will be unaffected and remain open for subscriptions.

Robeco manages ‎€30bn in credit strategies, which include Multi-Factor High Yield, Dynamic High Yield, Global IG Credits and sustainable solutions such as SDG Credit Income, according to the statement.

High yield has become a popular asset class as global interest rates are expected to remain low.

“All these zero interest rate policies around the world are pushing investors towards the riskier end of the fixed income markets, and frankly, that has been the case for the last 10 years, since the global financial crisis,” Tai Hui, Asia chief marketing strategist at JP Morgan Asset Management, said recently.

UBS Asset Management also favours high yield bonds, particularly those in Asia.

“The Asian high yield market has little exposure either to commodities or the consumer cyclical sector, so it is less vulnerable than US high yield to this year’s slump in economic activity or to future negative surprises,” Hayden Briscoe, head of fixed income in Asia-Pacific at UBS AM said previously.

Fund selectors in Asia have also favour high yield bonds and are expected to move cash to funds managing developed market investment grade and high yield corporate bonds, according to Last Word Media research.


The Robeco High Yield Bonds strategy vs category average

Source: FE Fundinfo. Three-year cumulative returns in US dollars. Note: the benchmark Bloomberg Barclays US Corp. HY & Pan Eur. HY. ex Fin. 2.5% Issuer Cap is not available in FE Fundinfo.


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