Robeco Corporate Hybrid bonds

Investment rationale

Robeco Corporate Hybrid Bonds IH EUR is a bond fund designed for long-term capital growth through exposure to global corporate hybrid bonds issued by non-financial companies. The fund has a summary risk indicator of 2 out of 7 and a recommended holding period of 3 years, and is suitable for investors who can set aside capital for at least 3-5 years and accept volatility. It is intended for investors seeking ESG considerations as a binding element in the investment process while still seeking optimum returns, and it can serve capital growth, income and portfolio diversification objectives. Its distinct role is as a specialist allocation to deeply subordinated, equity-like corporate hybrids, mainly from investment grade issuers, rather than a broad conventional corporate bond holding.

2026-08-31

How the strategy works

The fund is an actively managed UCITS SICAV sub-fund with the objective of providing long-term capital growth. It invests in global corporate hybrid bonds issued by non-financials, with selection based on fundamental analysis, and may also invest in hybrid capital of banks and insurers and in senior debt of non-financial corporates. The portfolio is primarily invested in BBB-rated bonds, with some BB-rated exposure that the manager states mainly reflects the subordinated nature of hybrid instruments rather than weaker underlying issuer quality; as of 31 August 2026, key sectors included Industrials, Utilities and Financials, with duration close to the benchmark and maturity of 4.66 years. The benchmark is the Bloomberg Global Corporate Hybrids 3% Issuer Cap (hedged into EUR), used for asset allocation purposes and long-run outperformance aims, while allowing substantial deviations and selection of securities outside the benchmark subject to limits on currencies and issuers. All currency risks are hedged, this share class is accumulating, derivatives may be used for hedging and investment purposes, the fund is daily tradable, and the recommended holding period is 3 years.

2026-08-31

Investment philosophy

• The investment universe consists mainly of global corporate hybrid bonds issued by non-financial companies, which are deeply subordinated bonds with equity-like features and mainly issued by investment grade issuers.

• Security selection is based on fundamental analysis, with the fund seeking best-in-class hybrid bonds with the best risk-return characteristics; the fund can also invest in hybrid capital of banks and insurers and in senior debt of non-financial corporates when these offer an attractive risk/return profile relative to the corporate hybrid market.

• The portfolio is built with active relative-value positioning against the Bloomberg Global Corporate Hybrids 3% Issuer Cap (hedged into EUR), while relative risk is controlled through limits on currencies and issuers and by keeping interest-rate sensitivity aligned with the index, using interest-rate futures if needed.

• At 31 August 2026, positioning was concentrated in hybrid securities, with 86.9% in hybrids, 7.3% in senior debt and 5.8% in cash and other instruments; sector weights include Industrials 40.2%, Utilities 38.0% and Financials 9.1%, and the largest holdings include Engie, OMV, Repsol Europe Finance, Oncor Electric Delivery, NextEra Energy Capital Holdings, Sempra, Enbridge, RWE, Dominion Energy and Volkswagen International Finance.

• At 31 August 2026, currency denomination was EUR 51.7%, USD 35.0% and GBP 7.5%, compared with benchmark weights of 54.2%, 44.2% and 1.5%. The portfolio was primarily invested in BBB-rated bonds; the manager attributed its smaller BB-rated hybrid allocation mainly to subordination rather than weaker underlying issuer quality.

2026-08-31

Management team

The fund managers are Daniel Ender and Jan Willem Knoll.

2026-08-31

Distinctive features

The fund offers specialised access to corporate hybrid bonds, a segment of subordinated, equity-like instruments that can offer high yields for investment grade ratings. It combines this specialist focus with a global opportunity set, fundamental security selection and tactical sector and currency-denomination allocation within the corporate hybrid market. The share class is EUR-denominated with all currency risks hedged, is daily tradable, and does not distribute dividends. Ongoing charges are 0.54%, with no performance fee.

2026-08-31

Risks

The fund has a summary risk indicator of 2 out of 7. The value of shares is sensitive to market fluctuations, instrument prices and changes in political, economic or market conditions. Corporate bonds are more risky and volatile than government bonds, and the fund’s focus on deeply subordinated corporate hybrids adds structural credit and subordination risk; the fund invests or may invest in contingent convertible bonds that can convert into equity or face full or partial write-down upon a trigger event. Derivatives are used for hedging and investment purposes and can create leverage, increasing exposure to market fluctuations, while a derivative counterparty may fail to fulfil its obligations, with collateral exchange used to reduce counterparty risk. Currency risks are hedged, but if an investor receives payments in a currency different from that of the home jurisdiction, final returns depend on exchange rates; the fund also promotes ESG characteristics under Article 8 and integrates sustainability risks, which may impact returns.

2026-08-31

Asset manager

The management company is Robeco Institutional Asset Management B.V. The fund is a sub-fund of Robeco Capital Growth Funds, a Luxembourg SICAV, and Robeco Institutional Asset Management B.V. is authorised in the Netherlands and regulated by the Autoriteit Financiële Markten. The manager is located at Weena 850, 3014 DA Rotterdam, The Netherlands.

2026-08-31

Performance commentary

In August 2026, the manager says resilient macro data supported equities while long-dated government bonds sold off, particularly in Europe, and credit spreads finished modestly tighter. Looking ahead, the manager says robust fundamentals are colliding with a more hawkish policy backdrop, with inflation pressure linked to the Iran war energy shock, tighter central bank policy and spreads near multi-year tights viewed as thin compensation for risk.

2026-08-31