Triodos Sustainable Bond Fund

Triodos Sustainable Bond Fund ended the year with an overweight position in sub-sovereign bonds and corporate bonds and an underweight position in sovereign bonds. During the year the overweight position in sub-sovereign bonds increased, due to the higher risk premium (relative to sovereign bonds). Furthermore, sub-sovereign bonds benefited from the European Central Bank’s bond purchase programme. As a result of the ECB’s accommodative monetary policy, many sovereign bonds traded at negative yields. The sub-fund maintained its overweight position in corporate bonds given the attractive credit premiums that this segment offers and in order to enhance the sub-fund’s diversification. Because of the strict sustainability criteria applied by the sub-fund, the portfolio does not contain the same number of bonds as the benchmark. Consequently, the sub-fund has a slightly higher modified duration (5.88) than the benchmark (5.77).

Breakdown by risk category as at
December 31, 2015* (as a % of portfolio)

Triodos Sustainable Bond Fund – Breakdown by risk category (pie chart)

Breakdown by duration as at
December 31, 2015* (as a % of portfolio)

Triodos Sustainable Bond Fund – Breakdown by duration (pie chart)

Top 5 corporate bond holdings as at
December 31, 2015*

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Name

% of net assets

 

 

 

*

Source: RBC Investor Services Bank

1.125%

Kreditanstalt für Wiederaufbau 2013–2018

3.4

2.500%

Kreditanstalt für Wiederaufbau 2012-2022

2.4

3.500%

European Investment Bank 2009-2016

2.3

4.750%

European Investment Bank 2007-2017

2.2

4.125%

Kreditanstalt für Wiederaufbau 2007-2017

2.0

 

 

 

Top 5 sovereign bond holdings as at
December 31, 2015*

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Name

% of net assets

 

 

 

*

Source: RBC Investor Services Bank

3.500%

French Government bond 2009–2020

3.8

0.250%

German Government bond 2014-2019

2.7

2.750%

French Government bond 2012–2027

2.3

3.250%

French Government bond 2010–2021

1.9

4.000%

Belgian Government bond 2008-2018

1.7

 

 

 

During the year, the overweight position in corporate bonds was reduced because of the increased capital market volatility and the uncertain macro-economic outlook. This reduced the risk profile of the sub-fund. In addition, positions in companies such as Volkswagen, KBC and TDC were sold because these companies no longer meet the sustainability criteria of the sub-fund. Also, various positions were reduced pro rata across the asset categories in order to fund the outflow of capital from the sub-fund.

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