NN First Class Return Fund - Passief

Transcription

1 NN First Class Return Fund - Passief All Fund in Scope data as of end December 018 The fund lost 8.6% in the fourth quarter The quarter was one of the worst for global equities in 45 years Performance The last three months of 018 proved to be the worst quarter for financial markets since the worldwide financial crisis. The global economy ended the year in a consolidation phase with growth remaining solid. However, a combination of political uncertainty like the postponement of the Brexit deal and yellow vests in Europe, the continuing trade dispute between the US and China, Trump openly criticizing Powell and Republicans and Democrats failing to reach a compromise on the US budget, lower global growth expectations and quantitative tightening brought the market to its knees. Global equities lost all their earlier gains of the year, while risky bonds also had a hard time. Safe treasuries proved to be the only place to hide. Equity markets turned in a negative performance for the quarter across all regions. The quarter was one of the worst for global equities in 45 years. The contribution from equities to the total return of the fund was negative (-7.1%). Overall our strategies in the spread markets contributed negatively as well (-0.%). During the fourth quarter treasury yields fell. However spread widening caused risky bonds to have a hard time. Only the emerging markets local bond category managed to print positive numbers while the hard currency strategy suffered from the trade tensions and the drop in oil process as well. Next to equities, commodities were hit hard as well and detracted from performance (-0.7%), as the category suffered from headwinds including trade protectionism and the US dollar strength. Investments in global real estate also detracted from performance (-0,%). However the strategy managed to add some value as it outperformed its benchmark. The same applies for the hedge fund replication strategy. Although contributing negatively to overall performance (-0.4%), it outperformed its benchmark. Statistics ISIN code NL Inception date februari 016 Ongoing charges 0.4% Outlook In the US, the economy will only gradually slow and we foresee a recovery in Europe and Japan as a result of higher domestic demand. This context can also be favourable for emerging markets, due to higher imports from the Western world and the limited likelihood of a stronger USD in this scenario. Furthermore, we envisage China continuing to stimulate its economy. The less positive news is that the political risks are still present everywhere and are making the fundamental outlooks deeply uncertain. The crucial question here is to what extent these risks will result in reduced confidence among investors and businesses. For example, the chaotic Brexit process has entered its final phase. In view of what is at stake, we feel both the UK and the EU will attempt to prevent a no-deal scenario. However common sense does not always prevail in these political points of contention, which could affect our base case scenario. Asset Class allocation Equities, 6% Real Estate, 8% Bonds, 18% Alternatives, 13% Cash, 0%

2 Fund description NN First Class Selective Passive Return Fund is a mixed fund that offers a carefully selected and diversified investment. The fund invests in multiple asset classes including equities, fixed income and alternative investments. The fund mainly invests in NN IP mutual funds and not by NN IP managed funds, including index funds and ETFs. The fund uses a risk return assumption model to periodically determine the allocation to the asset classes. The fund strives to achieve a diversified portfolio that provides an attractive return per unit of risk. Performance (%) (Net) 3 Months YTD 1 year NN FC Selective Passive Return Fund Equities 3 Months (%) Weight (%) Blackrock ISF-World index-euria BlackRock Emerging Markets Index Sub-Fun ishares Core MSCI World ETF Vanguard Global Stock Index Fund Institu Bonds* 3 Months (%) Weight (%) NN Euro Credit Fund NN (L) Global High Yield NN (L) Emerging Markets Debt HC (euro) NN (L) Emerging Markets Debt LB Real Estate* 3 Months (%) Weight (%) NN (L) Global Real Estate * Based on the gross performance of the funds (non-weighted), all figures are at end December 018. Commodities* 3 Months (%) Weight (%) NN (L) Commodity Enhanced Hedge Funds* 3 Months (%) Weight (%) NN (L) Alternative Beta Disclaimer This communication is intended for MiFID professional investors only. This communication has been prepared solely for the purpose of information and does not constitute an offer, in particular a prospectus or any invitation to treat, buy or sell any security or to participate in any trading strategy or the provision of investment services. While particular attention has been paid to the contents of this communication, no guarantee, warranty or representation, express or implied, is given to the accuracy, correctness or completeness thereof. Any information given in this communication may be subject to change or update without notice. Neither NN Investment Partners B.V., NN Investment Partners Holdings N.V. nor any other company or unit belonging to the NN Group, nor any of its directors or employees can be held directly or indirectly liable or responsible with respect to this communication. Use of the information contained in this communication is at your own risk. This communication and information contained herein must not be copied, reproduced, distributed or passed to any person other than the recipient without NN Investment Partners B.V. s prior written consent. In relation all the funds mentioned in this document, a Key Investor Information Document (KIID) has been published containing all necessary information about the product, the costs and the risks involved. The prospectus and the Key Investor Information Document (KIID) (if applicable) and other legally required documents relating to the fund are available on Investment sustains risk. Please note that the value of any investment may rise or fall and that past performance is not indicative of future results and should in no event be deemed as such. This communication is not directed at and must not be acted upon by US Persons as defined in Rule 90 of Regulation S of the United States Securities Act of 1933, and is not intended and may not be used to solicit sales of investments or subscription of securities in countries where this is prohibited by the relevant authorities or legislation. Any claims arising out of or in connection with the terms and conditions of this disclaimer are governed by Dutch law.

3 NN Liability Matching Fund - M Fund in scope All data as of end December 018 German 10-year Bund yield declined bps in the third quarter to 0.5% We expect gradual higher yield for the safe Euro bonds 5-year EUR swap rate down 1 bps over the quarter; from 0.39 to 0.18% Positive return of 1.0% reflection of the decrease in rates; duration 4.7 years Performance During the fourth quarter of 018, developed bond yields reversed the increase of the previous quarter. The underlying reason for the move was clearly different, however. In the previous quarter, bond yields mainly moved higher because of higher real yields, related to continuing strong US economic data. In the last quarter of the year, bond yields mainly declined because of lower break-even inflation due to the sharp drop in oil prices. On balance, yields on 10-year German government bond yields declined from almost 0.5% at the start of the quarter to about 0.5% at year-end and over the quarter the 5-year EUR swap rate decreased from 0.39% to 0.18%. Over the quarter the fund realized a net return of 1.0%. This increase reflects the decrease in Euro swap rates. At the end of the quarter, the AUM of the fund amounted to 937mln. Outlook Our view is that economic growth in developed markets will converge as the US fiscal sugar high fades. At the same time, we foresee a recovery in Europe and Japan, driven by domestic demand and a recovery from the one-off headwinds (new emission rules and natural disasters). In this environment, we expect more Fed rate hikes and probably a first rate hike from the ECB. Combined with an expected recovery in oil prices and less supportive demand-supply dynamics for government bonds mostly because of the end of ECB QE and the Fed s ongoing balance sheet reduction we expect a gradual rise in safe government bond yields. However, spikes in uncertainty might temporarily drive investors into safe government bonds. ISIN code NL Inception date March 014 Ongoing charges 0.5% 3 Months Year to date 1 year 3 year 5 year NN Liability Matching Fund M - N Treasuries 11. Swaps 0.4 Cash 88.4 Duration contribution (year) Treasuries 0.16 Swaps 4.5 Totaal

4 Fund description The NN Liability Matching Funds combine a matching portfolio tailored to individual pension goals with the practical advantages of a fund solution. By using three funds we are able to keep costs limited while maintaining high matching standards almost similar to a fully tailored institutional solution. We manage three Liability Matching Funds with different interest rate sensitivity (duration) profiles. The three funds primarily invest in Euro government bonds with a AAA rating (at purchase) and a maturity at issue of 1-3 years*. Within each of the three funds we raise the duration by interest rate swaps and bond futures. NN Liability Matching Fund (M) aims for a duration of around 4 years and LMF (L) and LMF (XL) of around 0 and 40 years respectively. The three funds are passively managed. The duration profiles of funds are constructed in such a way that when optimally combined they can closely match client specific duration profiles based on typical cashflow schemes. * When a bond rating is downgraded or the maturity drops below 1 year we do not need to sell. Duration allocation 4 3 Duration swy sw5y sw10y sw0y sw30y sw40y sw50y Maturity Disclaimer This communication is intended for MiFID professional investors only. This communication has been prepared solely for the purpose of information and does not constitute an offer, in particular a prospectus or any invitation to treat, buy or sell any security or to participate in any trading strategy or the provision of investment services. While particular attention has been paid to the contents of this communication, no guarantee, warranty or representation, express or implied, is given to the accuracy, correctness or completeness thereof. Any information given in this communication may be subject to change or update without notice. Neither NN Investment Partners B.V., NN Investment Partners Holdings N.V. nor any other company or unit belonging to the NN Group, nor any of its directors or employees can be held directly or indirectly liable or responsible with respect to this communication. Use of the information contained in this communication is at your own risk. This communication and information contained herein must not be copied, reproduced, distributed or passed to any person other than the recipient without NN Investment Partners B.V. s prior written consent. In relation all the funds mentioned in this document, a Key Investor Information Document (KIID) has been published containing all necessary information about the product, the costs and the risks involved. The prospectus and the Key Investor Information Document (KIID) (if applicable) and other legally required documents relating to the fund are available on Investment sustains risk. Please note that the value of any investment may rise or fall and that past performance is not indicative of future results and should in no event be deemed as such. This communication is not directed at and must not be acted upon by US Persons as defined in Rule 90 of Regulation S of the United States Securities Act of 1933, and is not intended and may not be used to solicit sales of investments or subscription of securities in countries where this is prohibited by the relevant authorities or legislation. Any claims arising out of or in connection with the terms and conditions of this disclaimer are governed by Dutch law.

5 NN Liability Matching Fund - L Fund in scope All data as of end December 018 German 10-year Bund yield declined bps in the third quarter to 0.5% We expect gradual higher yield for the safe Euro bonds 0-year EUR swap rate down 16 bps over the quarter; from 1.48 to 1.3% Positive return of 4.1% reflection of the decrease in rates; duration 1.7 years Performance During the fourth quarter of 018, developed bond yields reversed the increase of the previous quarter. The underlying reason for the move was clearly different, however. In the previous quarter, bond yields mainly moved higher because of higher real yields, related to continuing strong US economic data. In the last quarter of the year, bond yields mainly declined because of lower break-even inflation due to the sharp drop in oil prices. On balance, yields on 10-year German government bond yields declined from almost 0.5% at the start of the quarter to about 0.5% at year-end and over the quarter the 0-year EUR swap rate decreased from 1.48% to 1.3%. Over the quarter the fund realized a net return of 4.1%. This increase reflects the incremental decrease in Euro swap rates. At the end of the quarter, the AUM of the fund amounted to 1,76 mln. Outlook Our view is that economic growth in developed markets will converge as the US fiscal sugar high fades. At the same time, we foresee a recovery in Europe and Japan, driven by domestic demand and a recovery from the one-off headwinds (new emission rules and natural disasters). In this environment, we expect more Fed rate hikes and probably a first rate hike from the ECB. Combined with an expected recovery in oil prices and less supportive demand-supply dynamics for government bonds mostly because of the end of ECB QE and the Fed s ongoing balance sheet reduction we expect a gradual rise in safe government bond yields. However, spikes in uncertainty might temporarily drive investors into safe government bonds. ISIN code NL Inception date March 014 Ongoing charges 0.5% 3 Months Year to date 1 year 3 year 5 year NN Liability Matching Fund L - N Treasuries 8.4 Swaps.3 Cash 69.4 Duration contribution (year) Treasuries Swaps 1.78 Total

6 Fund description The NN Liability Matching Funds combine a matching portfolio tailored to individual pension goals with the practical advantages of a fund solution. By using three funds we are able to keep costs limited while maintaining high matching standards almost similar to a fully tailored institutional solution. We manage three Liability Matching Funds with different interest rate sensitivity (duration) profiles. The three funds primarily invest in Euro government bonds with a AAA rating (at purchase) and a maturity at issue of 1-3 years*. Within each of the three funds we raise the duration by interest rate swaps and bond futures. NN Liability Matching Fund (M) aims for a duration of around 4 years and LMF (L) and LMF (XL) of around 0 and 40 years respectively. The three funds are passively managed. The duration profiles of funds are constructed in such a way that when optimally combined they can closely match client specific duration profiles based on typical cashflow schemes. * When a bond rating is downgraded or the maturity drops below 1 year we do not need to sell. Duration allocation Duration swy sw5y sw10y sw0y sw30y sw40y sw50y Maturity Disclaimer This communication is intended for MiFID professional investors only. This communication has been prepared solely for the purpose of information and does not constitute an offer, in particular a prospectus or any invitation to treat, buy or sell any security or to participate in any trading strategy or the provision of investment services. While particular attention has been paid to the contents of this communication, no guarantee, warranty or representation, express or implied, is given to the accuracy, correctness or completeness thereof. Any information given in this communication may be subject to change or update without notice. Neither NN Investment Partners B.V., NN Investment Partners Holdings N.V. nor any other company or unit belonging to the NN Group, nor any of its directors or employees can be held directly or indirectly liable or responsible with respect to this communication. Use of the information contained in this communication is at your own risk. This communication and information contained herein must not be copied, reproduced, distributed or passed to any person other than the recipient without NN Investment Partners B.V. s prior written consent. In relation all the funds mentioned in this document, a Key Investor Information Document (KIID) has been published containing all necessary information about the product, the costs and the risks involved. The prospectus and the Key Investor Information Document (KIID) (if applicable) and other legally required documents relating to the fund are available on Investment sustains risk. Please note that the value of any investment may rise or fall and that past performance is not indicative of future results and should in no event be deemed as such. This communication is not directed at and must not be acted upon by US Persons as defined in Rule 90 of Regulation S of the United States Securities Act of 1933, and is not intended and may not be used to solicit sales of investments or subscription of securities in countries where this is prohibited by the relevant authorities or legislation. Any claims arising out of or in connection with the terms and conditions of this disclaimer are governed by Dutch law.

7 NN Liability Matching Fund - XL Fund in scope All data as of end December 018 German 10-year Bund yield declined bps in the third quarter to 0.5% We expect gradual higher yield for the safe Euro bonds 40-year EUR swap rate down 15 bps over the quarter; from 1.5 to 1.37% Positive return of 6.6% reflection of the decrease in rates; duration 40.1 years Performance During the fourth quarter of 018, developed bond yields reversed the increase of the previous quarter. The underlying reason for the move was clearly different, however. In the previous quarter, bond yields mainly moved higher because of higher real yields, related to continuing strong US economic data. In the last quarter of the year, bond yields mainly declined because of lower break-even inflation due to the sharp drop in oil prices. On balance, yields on 10-year German government bond yields declined from almost 0.5% at the start of the quarter to about 0.5% at year-end and over the quarter the 40-year EUR swap rate decreased from 1.5% to 1.37%. Over the quarter the fund realized a net return of 6.6%. This increase reflects the incremental decrease in Euro swap rates. At the end of the quarter, the AUM of the fund amounted to 1,577 mln. Outlook Our view is that economic growth in developed markets will converge as the US fiscal sugar high fades. At the same time, we foresee a recovery in Europe and Japan, driven by domestic demand and a recovery from the one-off headwinds (new emission rules and natural disasters). In this environment, we expect more Fed rate hikes and probably a first rate hike from the ECB. Combined with an expected recovery in oil prices and less supportive demand-supply dynamics for government bonds mostly because of the end of ECB QE and the Fed s ongoing balance sheet reduction we expect a gradual rise in safe government bond yields. However, spikes in uncertainty might temporarily drive investors into safe government bonds. ISIN code NL Inception date March 014 Ongoing charges 0.5% 3 Months Year to 1 year 3 year date 5 year NN Liability Matching Fund XL - N Treasuries 45.6 Swaps.0 Cash 5.4 Duration contribution (year) Treasuries Swaps Total

8 Fund description The NN Liability Matching Funds combine a matching portfolio tailored to individual pension goals with the practical advantages of a fund solution. By using three funds we are able to keep costs limited while maintaining high matching standards almost similar to a fully tailored institutional solution. We manage three Liability Matching Funds with different interest rate sensitivity (duration) profiles. The three funds primarily invest in Euro government bonds with a AAA rating (at purchase) and a maturity at issue of 1-3 years*. Within each of the three funds we raise the duration by interest rate swaps and bond futures. NN Liability Matching Fund (M) aims for a duration of around 4 years and LMF (L) and LMF (XL) of around 0 and 40 years respectively. The three funds are passively managed. The duration profiles of funds are constructed in such a way that when optimally combined they can closely match client specific duration profiles based on typical cashflow schemes. * When a bond rating is downgraded or the maturity drops below 1 year we do not need to sell. Duration allocation 0,0 15,0 Duration 10,0 5,0 0,0-5,0 swy sw5y sw10y sw0y sw30y sw40y sw50y Maturity Disclaimer This communication is intended for MiFID professional investors only. This communication has been prepared solely for the purpose of information and does not constitute an offer, in particular a prospectus or any invitation to treat, buy or sell any security or to participate in any trading strategy or the provision of investment services. While particular attention has been paid to the contents of this communication, no guarantee, warranty or representation, express or implied, is given to the accuracy, correctness or completeness thereof. Any information given in this communication may be subject to change or update without notice. Neither NN Investment Partners B.V., NN Investment Partners Holdings N.V. nor any other company or unit belonging to the NN Group, nor any of its directors or employees can be held directly or indirectly liable or responsible with respect to this communication. Use of the information contained in this communication is at your own risk. This communication and information contained herein must not be copied, reproduced, distributed or passed to any person other than the recipient without NN Investment Partners B.V. s prior written consent. In relation all the funds mentioned in this document, a Key Investor Information Document (KIID) has been published containing all necessary information about the product, the costs and the risks involved. The prospectus and the Key Investor Information Document (KIID) (if applicable) and other legally required documents relating to the fund are available on Investment sustains risk. Please note that the value of any investment may rise or fall and that past performance is not indicative of future results and should in no event be deemed as such. This communication is not directed at and must not be acted upon by US Persons as defined in Rule 90 of Regulation S of the United States Securities Act of 1933, and is not intended and may not be used to solicit sales of investments or subscription of securities in countries where this is prohibited by the relevant authorities or legislation. Any claims arising out of or in connection with the terms and conditions of this disclaimer are governed by Dutch law.