Rotterdam, 30 March 2005
RORENTO N.V.
ANNUAL REPORT 2004
% ROBECO
CONTENTS
General information
2
Report of the supervisory board
5
Report of the management board
7
Financial statements
12
Balance
sheet
12
Profit and loss account
12
Cash-flow summary 14
Notes
15
Other data
24
Spread of net assets
27
Bond
portfolio
28
GENERAL INFORMATION
RORENTO N.V.1)
(public limited liability company with an open-end structure
established according to the laws of the Antilles, having its
registered office in Philipsburg, St. Maarten, Netherlands Antilles)
Ara Hill-Top, Unit A5
Pletterijweg Oost 1
Willemstad, Cura�ao
Supervisory Board
Paulus C. van den Hoek, chairman
Constant E.M. Beckers (as of 22 April until 1 July 2004)
Gilles Izeboud (as of 22 April 2004)
Johan Kremers
Petrus A.W. Roef (until 22 April 2004)
Anthony Ruys (until 22 April 2004)
Dirk P.M. Verbeek
Management Board
Edith J. Siermann, chairman/fund manager (as of 5 May 2004)
Jacob J. van Duijn, chairman (until 5 May 2004)
Frank L.E.G. Boll
Gerald B. Smith (until 5 May 2004)
Karel J.V. Tavernier
Bastiaan Vliegenthart (until 5 May 2004)
International Advisory Board
Martin S. Feldstein
Toyoo Gyohten
Paul J. Keating
Karl O. P�hl
H. Onno C.R. Ruding
Secretary of the Company
David H. Cross
Management Board of Robeco Groep N.V.
(the holding company of the Robeco Group)
George A. M�ller, chairman (as of 1 July 2004)
G�ry A.M.J. Daeninck, chairman (until 1 July 2004)
Stefan T. Bichsel
Leni M.T. Boeren (as of 1 January 2005)
Sander van Eijkern (as of 29 November 2004)
Hans H. van der Koogh (until 8 February 2005)
Constant T. L. Korthout (as of 27 December 2004)
Niek F. Molenaar (as of 27 December 2004)
GENERAL MEETING OF SHAREHOLDERS AND INFORMATIVE MEETING
The General Meeting of Shareholders will be held at Willemstad,
Cura�ao (Netherlands Antilles) on 27 April 2005 at 10:30 hours. The
informative meeting will be held on 21 April 2004 at 12:30 hours at
the Hilton Rotterdam, Weena 10, Rotterdam, the Netherlands.
Holders of share certificates to bearer wishing to attend and vote at
the meeting should apply for a written statement from the Euroclear
Netherlands-affiliated institution where their shares are held, which
will give admission to the meeting. The institutions affiliated with
Euroclear Netherlands should submit a copy of this statement to ABN
Amro Bank N.V. stating the number of shares held for the shareholder
concerned prior to the meeting, and which will be frozen until after
the meeting. This statement should be submitted not later than 20
April 2005.
Holders of K shares should lodge their share certificates not later
than 20 April 2005 with one of the banks mentioned in the convening
notice of 30 March 2005.
Holders of an account with Robeco Group Accounts System in Rotterdam,
Banque Robeco S.A. in Paris or Robeco Bank Belgium in Brussels
wishing to attend the meeting should inform the management board of
Robeco Institutional Asset Management B.V. in writing not later than
20 April 2005.
Holders of bearer certificates wishing to attend the informative
meeting in Rotterdam should lodge their certificates not later than
14 April 2005 with one of the banks mentioned in the convening notice
of 30 March 2005. Holders of an account with Robeco Group Accounts
System in Rotterdam, Banque Robeco S.A. in Paris or Robeco Bank
Belgium in Brussels wishing to attend the meeting should inform the
management board of Avirento B.V. in writing not later than 14 April
2005.
This report is also published in Dutch, French and German. Only the
original Dutch edition is binding and will be submitted to the
General Meeting of Shareholders.
PROSPECTUS
The prospectus is available at the offices of the company and via
www.robeco.com.
Supervisory Board
Paulus C. van den Hoek, chairman (66)
Dutch nationality. Appointed in 1990 and last reappointed in 2000.
Lawyer and partner at Stibbe, lawyers and notaries, in Amsterdam, the
Netherlands, since 1965. Former Dean of the Dutch National Bar
(1981/1984). Supervisory director of ASM International, Ballast
Nedam, B�hrmann, Euronext Amsterdam, Robeco, Robeco Groep N.V. and
Rolinco.
Gilles Izeboud (62)
Dutch nationality. Appointed in 2004.
Former partner at PricewaterhouseCoopers. Former member of the
Committee Corporate Governance in the Netherlands. Deputy justice of
the Enterprise Section of the Amsterdam Court of Appeal. Supervisory
director of Robeco, Robeco Groep and Rolinco.
Johan Kremers (71)
Dutch nationality. Appointed in 1997 and reappointed in 2001.
Former Queen's Commissioner in the Dutch province of Limburg
(1977/90), vice-chairman of the Management Board of Robeco Groep N.V.
and vice-chairman of Rodamco (1990/97). Supervisory director of
Robeco, Robeco Groep N.V. and Rolinco.
Dirk P.M. Verbeek (54)
Dutch nationality. Appointed in 2001 and reappointed in 2003.
Member of the executive board of Aon Group of Chicago, USA and
chairman/CEO of the executive board of Aon Holdings in Rotterdam, the
Netherlands. Supervisory director of Petroplus International, Robeco,
Robeco Groep N.V. and Rolinco.
N.B. Only supervisory directorships at listed companies and the
Robeco Group are mentioned.
REPORT OF THE SUPERVISORY BOARD
We herewith present the Rorento N.V. accounts for the financial year
2004 together with the report of the management board.
The way in which the supervisory board carries out its supervisory
duties is significantly determined by the structure of the Robeco
Group. The management of Rorento N.V. is carried out by Robeco
Nederland B.V., which employs the personnel who work for Rorento
N.V., including its management board. Robeco Nederland B.V. is a
wholly-owned subsidiary of Robeco Groep N.V. Discussion of the
management of Rorento N.V. can therefore take place in the
supervisory board of either the company or that of Robeco Groep N.V.
As a result of the personal links between the members of the two
boards, in practice this presents no difficulties.
The purpose of an investment institution such as Rorento N.V., as
laid down in its Articles of Association, is limited to the investing
of its assets in securities in such a way that risks are diversified
with the object of allowing its shareholders to participate in the
profits. At its meetings therefore, the supervisory board devotes
extensive attention to the investment policy, the realized results
and the development of the assets invested, on the basis of frequent
and detailed reports. In connection with the above regarding the
structure of the Robeco Group, matters which are also relevant to
Rorento N.V., such as the risks associated with the investment policy
and the application of instruments to manage these risks, may also be
discussed at the meetings of the supervisory board of Robeco Groep
N.V.
The general policy of the Robeco Group is determined by the executive
board of Robeco Groep N.V. in consultation with its supervisory
board. This means that matters such as product development,
acquisitions and risk management are discussed at the meetings of the
supervisory board of Robeco Groep N.V. An audit and remuneration
committee has been appointed by this board, and intensive discussions
were held with the internal audit department and the external auditor
concerning matters affecting the whole Robeco Group. Two members of
this committee are also supervisory directors of Rorento N.V. Besides
the subjects mentioned, no special issues were discussed at the
meetings of the supervisory board during the reporting year.
The Committee for Modernising Collective Investment Schemes (known as
the 'Winter Committee') published its report on 22 December 2004. The
consequences of the recommendations in this report for the Robeco
Group will be evaluated in the course of 2005. In anticipation of
their recording in regulations, several of these recommendations were
already taken into account in this annual report.
We have taken note of the contents of the auditor's report presented
by Ernst & Young Accountants and recommend approval of the annual
financial statements. The management board proposes not to distribute
the profit but to allocate this income to Other Reserves, as usual.
Messrs. P.A.W. Roef and A. Ruys stepped down as members of the
supervisory board at the General Meeting of Shareholders held on 5
May 2004. At the same meeting Messrs. G. Izeboud and C.E.M. Beckers
were appointed as supervisory directors of the company with immediate
effect. Mr. Beckers resigned of his own accord on 1 July 2004 because
of a possible conflict of interests relating to a new position he had
accepted in the financial world.
It will be proposed at the General Meeting of Shareholders that Mr.
Ph. Lambert be appointed as a supervisory director of the company
with immediate effect to fill the vacancy arising form Mr. Becker's
resignation, on condition that the appointment is approved by the
Central Bank of the Netherlands Antilles. Mr. Lambert works at
Unilever as head of Corporate Pensions and in that capacity is
responsible for the pensions and investments of Unilever's global
pension fund.
Furthermore, at the aforementioned meeting of 5 May 2004 Messrs. J.J.
van Duijn (chairman), B. Vliegenthart and G.B. Smith resigned as
members of the management board. Mrs. E.J. Siermann was appointed as
a member of the management board of Rorento N.V. as of the same date.
Mr. J. Kremers will retire as a supervisory director at the General
Meeting of Shareholders on 27 April 2005, as he has reached the
statutory retirement age. Mr. Kremers has been a member of the
supervisory board since 1997. The board is extremely grateful for his
important contribution to the exercise of its advisory and
supervisory duties throughout this period.
According to schedule, Mr. P. van den Hoek will resign at the General
Meeting of Shareholders to be held on 27 April 2005. Mr. van den Hoek
is available for reelection. It is proposed that he be reappointed as
a supervisory director of the company with immediate effect.
At the General Meeting Mr. K.J.V. Tavenier will also, of his own
accord, resign as a member of the management board of Rorento N.V. To
fill the vacancy arising from his departure, it will be proposed that
Mr. F.L.I. van de Walle be appointed as a member of the board with
immediate effect, subject to the approval of the central Bank van de
Nederlandse Antillen. The board is extremely grateful for Mr.
Tavenier's contribution to the development of Rorento N.V.
Philipsburg, 11 March 2005
The supervisory board
REPORT OF THE MANAGEMENT BOARD
GENERAL INTRODUCTION
Recovery of the global economy continues in 2004
The global economy again showed considerable growth in 2004 as the
recovery that began in the previous year continued. Companies saw
their earnings rise as a result of ongoing cost-cutting and
increasing turnover. Consumers continued to spend, encouraged partly
by rising house prices and slightly improved employment prospects.
However worries about the sustainability of economic growth also
remained. Rising commodity prices formed a threat and extra demand
from emerging economies, such as China, pushed prices higher. These
price movements were exacerbated by speculators. Political
uncertainty in various oil-producing countries was also a
contributory factor. Another source of concern was the depreciation
of the US dollar and the resulting deterioration in the US trade
balance and the US government's budget deficit.
Despite the higher commodity prices, inflation remained moderate.
This can partly be attributed to structural factors such as the
intensified international competition and the improved productivity
in many sectors. Another contributory factor was that the capacity
surplus accumulated at the end of the 1990s had not been completely
eliminated. It was therefore not easy for companies to pass on price
increases to consumers. Finally there was a lack of wage-cost
inflation. For the time being, the labor reserve in most countries is
still large enough to curb wage demands.
Differences between the regions still existed in 2004. The US
economy performed relatively well. Consumer spending was high. US
household savings have fallen on balance, which was partly caused by
the rising house prices. The euro zone's performance was once again
disappointing. The main reason was that a pick-up in domestic demand
failed to materialize, which in turn was due to consumers' concerns
about the consequences of structural reforms and labor-market
conditions. The emerging economies in Asia are becoming increasingly
important. Partly because of its geographical location, Japan is also
benefiting from this and it seems that the period of deflation there
has now come to an end. However, this has not led the Japanese
monetary authorities to increase official short-term interest rates.
The European central bank also left its official rates unchanged,
whereas the US central bank started reversing the interest-rate cuts
of previous years.
The bond markets performed well
In 2004, US capital-market rates remained unchanged. This is
surprising considering that halfway through the year the Federal
Reserve Bank began to normalize monetary conditions by raising
official short-term rates in five steps from 1% to 2.25%. The absence
of inflationary pressure explains the limited reaction of the bond
market as does the fact that Asian central banks bought large
quantities of US government bonds. These transactions stemmed from a
desire to protect their local currencies from appreciating against
the US dollar. In the eurozone, capital-market rates declined further
in response to the region's lagging economic development. In Japan,
capital-market rates did rise but only slightly, when it became clear
that the economic outlook was more positive and that the period of
deflation seemed to be over.
Non-government bonds, including high yield, saw good returns in
2004. As in 2003, the climate was favorable for credits last year.
Companies' focus on a healthy balance sheet and free cash flow
ensured that their creditworthiness remained stable and in some cases
improved. This, combined with investors' strong demand for extra
returns, caused the average risk premium to fall further, to the
lowest level in the last five years.
Outlook
The US central bank is expected to further normalize its official
interest rates in 2005, but the speed at which this will occur
depends on the inflation and employment levels in the United States.
This will also determine the direction of capital-market rates. We
expect that the low US yields will begin to rise at some point in
2005. Whether the European Central Bank will also tighten its
monetary policy in the short term remains to be seen. Due to the
strong euro in combination with slower economic growth expectations
that this will occur are not high. We therefore think that European
government bonds will outperform in the period to come.
We expect the macroeconomic environment to remain favorable for
credits this year. Partly due to considerable restructuring and
cost-cutting, companies are now in better shape than they were a
while ago. This favorable picture is reflected in current
corporate-bond valuations. We do not anticipate a further decline in
risk premiums. In addition companies will gradually shift their focus
to more growth-related initiatives. The first signs of this are
already visible in the increased merger and acquisition activities.
Given the still strong demand for corporate bonds and related
products in combination with the relatively short supply of new
paper, we do not expect that the average risk premium will rise
significantly.
INVESTMENT RESULT
Investment results
(in %) Average
over last 5
2004 2003 2002 2001 2000 years
Based on:
- - market price 2.7 1.3 1.4 3.0 8.3 3.3
- - net asset value 2.8 1.3 2.2 4.5 7.8 3.7
Benchmark1 3.7 -0.5 4.1 4.5 9.5 4.2
Total net assets2 3.1 3.7 4.4 5.3 5.3
1 The JP Morgan Government Bond Index Plus and from 1 January 2002
the Lehman Multiverse Index. Currencies have been converted at rates
supplied by World Market Reuters. Figures prior to 2001 are based on
the 'fixing rate' of the Dutch central bank.
2 EUR x billion.
During 2004, Rorento's share price rose from EUR 38.82 to EUR 39.88.
This is an investment result of 2.7%. Based on the net asset value,
which rose from EUR 39.02 to EUR 40.10, the investment result was
2.8%.
The fund's benchmark, the Lehman Multiverse Index, 50% hedged into
euros, rose 3.7% over the same period.
INVESTMENT POLICY
+-------------------------------------------------------------------+
|Developments and Rorento's modified duration* |
|-------------------------------------------------------------------|
|Decreasing interest|Sharp correction|Interest rates|The dollar's |
|rates on balance, |due to strong US|decrease again|free fall leads|
|due to |job growth, |worldwide. Oil|to falling |
|disappointing US |worries about |prices soar |interest rates |
|macroeconomic news |series of rate |(brake on |in Europe and |
| |hikes in the |growth) |rising interest|
| |short term | |rates in the US|
|-------------------+----------------+--------------+---------------|
| J | F | M | A | M | J | J | A | S | O | N | D |
|------+------+-----+-----+-----+----+----+----+----+-----+----+----|
| 3,9 | 4,3 | 4,9 | 2,5 | 2,3 |2,1 |2,7 |4,9 |6,3 | 4,9 |4,9 |4,9 |
+-------------------------------------------------------------------+
Duration and country-allocation policy
Capital-market rates in the US, the eurozone and Japan moved in a
rather narrow trading range during the first few months of this year.
The return of healthy economic growth, especially in the United
States, has so far been accompanied by low inflation and little
change in the level of unemployment, keeping the interest-rate
markets in balance. Rorento anticipated higher US capital market
rates , based on the view that the labor-market situation would
improve. In February, unexpectedly poor US macroeconomic figures,
mostly relating to employment and consumer confidence, caused
interest rates to decline sharply and the underweight position was
subsequently closed in early March. The 10-year US Treasury yield
fell from around 4.2% at the beginning of February to lower than 3.7%
in mid-March. The other bond markets followed. Very quickly however,
it transpired that the markets had moved in the wrong direction as an
unexpectedly strong increase in the number of jobs in the US caused a
sharp correction in the major capital markets. Inflation also rose,
partly due to the high price of oil. As a result of this, the
likelihood that the Fed would raise interest rates increased. Since
the Japanese economy, after many years of disappointments, finally
began to show clear signs of recovery, bond yields moved rapidly
higher in all markets. Rorento quickly moved to underweight positions
in April, this time not only in the US but also in the eurozone and
Japan. Bond yields reached a temporary high in mid-June. Towards the
end of June the situation reversed. Economic-growth and capital
expenditure figures were disappointing. Fed officials indicated that
the pace of rate hikes would probably slacken somewhat, which led to
a renewed rally in US and European bond markets and caused
capital-market rates to fall. Although US economic data still
indicated reasonably healthy growth, in the summer months it appeared
that the market had already discounted the good news. Disappointing
news like a slightly lower-than-expected GDP growth figure and
disappointing US job growth therefore led to strong price movements
and falling bond yields. Europe was unable to escape this trend,
which is not surprising considering this region's markedly weaker
economic situation. The surging oil price was not interpreted by the
market as a sign of strong global economic growth but rather as an
obstacle to future growth and this resulted in a further decline in
capital-market rates. The 10-year US Treasury yield fell from a peak
of 4.9% in June to below 4% in September. Rorento also held an
underweight duration position in the various regions during part of
this period of falling interest rates but closed these positions in
August.
A rather exceptional situation occurred in the fourth quarter as US
capital-market rates resumed their upward trend, while European
capital-market rates continued their downtrend. The disappearance of
the correlation between these two markets seldom occurs because
usually the same macroeconomic data effect the corporate sector and
economic growth in both regions. However, the dollar's free fall of
more than 10% in one quarter against the euro, led to increased fears
of inflation in the US and the expectation that the Fed would again
increase money-market rates more quickly and steeply. In Europe, on
the other hand, the strong appreciation of the euro increased
expectations that economic growth would be curbed further and that
inflation would not be a significant issue for the ECB for the time
being. In addition, US macroeconomic figures still compared very
favorably with those of eurozone countries. Consequently, the
difference between US and European 10-year yields increased from
almost nil to approximately 70 basis points. Rorento responded to
this development by combining an overweight in Europe with an
underweight in the US for a large part of the fourth quarter, a
decision which proved to be excellent.
Besides having an active policy with regard to the interest-rate
sensitivity of the portfolio as a whole, spread trades are also used
to take advantage of differences in the relative attractiveness of
countries and regions . In addition to the aforementioned spread
trade between Europe and the US in the fourth quarter, the fund held
overweight positions in the Australian and New Zealand bond markets
during a large part of the first three quarters. Corresponding
underweight positions were taken in US bonds. Rorento was also
overweight in South African bonds in the first quarter of 2004.
Almost throughout the entire period under review, the portfolio was
positioned to benefit from a flatter yield curve in the US and in May
a position was taken to benefit from a steeper yield curve in the
eurozone.
Policy regarding non-government bonds
The continuing economic recovery led to a favorable climate for
corporate bonds which also benefitted from strongly improved balance
sheets, the focus on healthy financial ratios and the use of low
interest-rate levels for cheap refinancing and reducing interest
burdens. Throughout 2004 the market was still supported by strong
demand for extra returns and because of this, for corporate bonds.
Rorento was overweight in corporates throughout the reporting period,
despite this market's excellent rally in 2003. This was,
nevertheless, a good decision as corporates once again clearly
outperformed government bonds during the whole of 2004. The fund was
mainly overweight in the lower rating categories of A and BBB.
However, in the summer this overweight in corporate bonds was
considerably reduced. This move was mainly triggered by the fact that
the valuation of this investment category had risen strongly. Rorento
however maintains a small overweight which is concentrated in the
financials and industrials sectors. The reduced overweight in
corporates also led to a smaller overweight in the lower rating
categories.
High-yield and emerging-country debt also benefited from the improved
outlook for the global economy. Rorento was more or less neutrally
positioned in these markets throughout the reporting period.
Currency policy
After a trend of euro weakness began in February, Rorento took an
overweight position in the dollar, which was brought back to neutral
in May. In June and July Rorento was overweight in the euro and the
Swiss franc against the US dollar. Also in October the fund briefly
held overweight positions in the euro, the Swiss franc and the
Japanese yen against the dollar.
Philipsburg, 11 March 2005
The management board
FINANCIAL STATEMENTS
BALANCE SHEET before profit appropriation , EUR x million
31/12/2004 31/12/2003
Investments
Financial investments
Bonds and other fixed-income securities 1,.9 2,807 3,471
Derivatives 2.,2 28 21
Deposits 3 303 1,007
Other financial investments 4 424 222
__________ __________
Total investments 3,562 4,721
Accounts receivable
Interest receivable 49 78
Receivable on securities transactions 13 32
Affiliated companies 5 26 28
Sundry debtors 6 - 5
__________ __________
88 143
Other assets
Cash 83 -
Accounts payable
Payable to credit institutions - 17
Payable on securities transactions 7 611 1,169
Affiliated companies 3 3
Sundry creditors 8 1 -
__________ __________
615 1,189
__________ __________
Accounts receivable and other assets less
current liabilities -527 -1,046
__________ __________
Shareholders' equity 3,118 3,675
Composition of shareholders' equity 10
Issued capital 233 283
Other reserves 2,787 3,333
Net result 98 59
__________ __________
3,118 3,675
PROFIT AND LOSS ACCOUNT EUR x million
2004 2003
Investment income 139 175
Movements in value 1,.2,3,4 -19 -91
_________ _________
120 84
Costs
Management costs 15 21 24
Service fee 15 1 -
Other costs 17 - 1
_________ _________
22 25
_________ _________
Net result 98 59
CASH FLOW SUMMARY
indirect method, EUR x million
2004 2003
Cash flow from investment activities
Net result 98 59
Realized and unrealized results 19 91
Purchase of investments -17,775 -18,454
Sale of investments 18,912 18,542
Increase(-)/decrease(+) accounts receivable 55 86
Increase(+)/decrease(-) accounts payable -555 449
__________ __________
754 773
Cash flow from financing activities
Received for shares subscribed 177 73
Paid for repurchase of own shares -832 -879
Increase(+)/decrease(-) accounts payable -2 -12
__________ __________
-657 -818
__________ __________
Net cash flow 97 -45
Currency and cash revaluation 3 42
__________ __________
Increase (+)/decrease (-) cash 100 -3
Accounts payable to credit institutions at -17 -14
opening date
__________ __________
Total cash at opening date -17 -14
Accounts payable to credit institutions at - -17
closing date
Cash at closing date 83 -
__________ __________
Total cash at closing date 83 -17
NOTES
General
Rorento (hereafter also referred to as 'the fund') is an investment
institution registered in the Netherlands Antilles and as such is not
subject to Dutch corporate-income tax or capital tax. It is only
liable to pay a minor sum in Netherlands Antilles profits tax. The
financial statements are in euros and are drawn up in accordance with
regulations prevailing in the Netherlands. The fund holds a license
in accordance with article 11, section a, of the National Ordinance
on the Supervision of Investment Institutions and Administrators
('Ltba', Landsverordening Toezicht op Beleggingsinstellingen en
Administrateurs). The fund also holds a license from the AFM (the
Dutch Authority for the Financial Markets) under the Dutch Investment
Institutions Supervision Act ('Wtb', Wet toezicht
beleggingsinstellingen).
System change
As a result of changes to the Guidelines for Annual Reporting, with
effect from the 2004 financial year changes in the value of
investments, both realized and unrealized, are reported in the Profit
and loss account. Furthermore, the market value of derivatives, which
was formerly reported under sundry debtors or sundry creditors is now
reported under financial investments. In the Profit and loss account
under Other costs a number of specific costs are reported including
costs that were previously charged directly to net assets. The change
has no effect on the assets as at 31 December 2003 and 31 December
2004. The effect on the result over 2003 amounts to EUR -92 million,
and over 2004 EUR -19 million. Comparative figures in this report
have been adjusted accordingly where necessary.
Models
The annual financial statements have been drawn up in conformity with
the models provided by Dutch legislature. In certain areas
descriptions have been used which better express the nature of the
items and relate better to the characteristics of an investment
company.
Open-end fund
Rorento N.V. is an open-end investment company, meaning that, barring
exceptional circumstances, Rorento N.V. issues and repurchases its
shares via the intermediary on a daily basis at prices approximating
net asset value. Robeco Investment Consulting B.V. functions as the
intermediary between Rorento N.V. and investors for the issuance and
repurchase of shares, as a result of which Rorento N.V. issues and
repurchases its shares at net asset value. The abovementioned margin
between the net asset value and the bid and offer prices, and the
associated costs, are for the account and risk of the intermediary.
The intermediary will distribute any positive results, calculated
cumulatively, to the funds on a quarterly basis. Distribution will be
in proportion to each fund's positive contribution to the
intermediary's result. A buffer is maintained to cover any future
losses.
Outsourcing core tasks
The administration has been outsourced to Robeco Institutional Asset
Management B.V. (until 1 October 2001 to Avirento B.V.), a 100%
subsidiary of Robeco Groep N.V. These costs are covered by the
service fee. Agreements have been made with the aforementioned party
relating to the provision of information and performance standards.
accounting principles
General
Unless stated otherwise, items shown in the annual financial
statements are included at nominal value and expressed in millions of
euros.
Financial investments
Financial investments are included at fair value. The fair value of
bonds and other fixed-income securities is based on the market price
and other market quotations at closing date. For derivatives such as
forward exchange contracts, this value is based on currency rates and
reference interest rates at closing date and for futures,
interest-rate swaps and forward purchases of mortgage-backed
securities this value is based on the market price and other market
quotations at closing date. Deposits and certificates of CDs/CPs are
valued on the basis of exchange rates and reference interest rates at
closing date. For call money, the real value is the nominal value.
Transaction costs incurred in the purchase and sale of investments
are included in the purchase or sale price as appropriate.
Affiliated parties
Rorento N.V. is affiliated to the entities belonging to Robeco Groep
N.V. The affiliation with Robeco Groep N.V. is the result of the
possibility of having decisive control or a substantial influence on
the fund's business policy. Robeco Groep N.V. belongs to the Rabobank
Group. The management structure of Robeco Groep N.V., in which
significant authority is allocated to its independent supervisory
board, is such that Rabobank does not have a meaningful say in or
influence on the fund's business policy. Robeco Groep N.V. pursues an
independent investment policy on behalf of its affiliated investment
companies, taking into account the interests of the investors
involved. Besides services of other market parties, Rorento N.V. also
uses the services of one or more of these affiliated entities
including transactions relating to securities, treasury, derivatives,
custody, securities lending, and sale and purchase of its own shares,
as well as management activities. Transactions are executed at market
rates.
Hard commissions and soft-dollar arrangements
There were no hard commissions or soft-dollar arrangements during the
reporting period.
determination of the result
General
Investment results are determined by interest income, rises or
declines in stock prices, rises or declines in foreign exchange rates
and results of (forward) transactions in currencies and derivative
instruments. The results are accounted for in the Profit and loss
account.
Investment income
Interest income on investments in bonds, other fixed-income
securities, deposits, other financial investments, cash and income
from loan transactions. Accrued interest at balance-sheet date is
taken into account.
Movements in value
Realized and unrealized capital gains and losses on securities and
currencies.
Foreign currencies
Transactions in currencies other than the euro are converted into
euros at the exchange rates valid at the time. Assets and liabilities
expressed in other currencies are converted into euros at the
exchange rate prevailing at balance-sheet date. Any exchange
differences arising are accounted for in the Profit and loss account.
FINANCIAL INSTRUMENTS
Risk
Transactions in financial instruments may lead to the fund being
subject to the risks described below or to the fund transferring
these risks to another party.
Price risks
Currency risk is the risk that the value of a financial instrument
will fluctuate as a result of changes in exchange rates.
Interest-rate risk is the risk that the value of a financial
instrument will fluctuate as a result of changes in market rates. The
value of investments in fixed-income securities depends directly on
market rates. Duration is used as the measure for the portfolio's
sensitivity to interest-rate movements. The portfolio's sensitivity
to fluctuations in market rates can be influenced by changing the
portfolio's duration. Further information on the duration policy can
be found in the report of the management board. Market risk is the
risk that the value of a financial instrument will fluctuate as a
result of changes in market prices, caused by factors that
exclusively apply to the individual instrument or its issuer or
caused by factors that affect all instruments traded in the market.
The fund minimizes risks by diversifying over countries, currencies
and issuers. Investments are made primarily in bonds issued or
guaranteed by OECD member countries and by companies based in these
countries. The fund pursues an active currency policy. Rorento
invests a limited part of its assets in paper qualified as high yield
by rating agencies.
Credit risk
Credit risk is the risk that the counterparty of a financial
instrument will no longer meet its obligations, as a result of which
the fund will suffer a financial loss. The fund minimizes this risk
by trading exclusively with reputable counterparties with a rating of
at least P1 from Moody's or A from Standard & Poor's. Wherever it is
customary in the market, the fund will demand and obtain collateral.
Liquidity risk
Liquidity risk is the risk that the fund is not able to obtain the
financial means required to meet the obligations arising from
financial instruments. The fund minimizes this risk by mainly
investing in financial instruments that are tradable on a daily
basis.
Insight into actual risks
The report of the management board, the balance sheet, the notes to
the balance sheet and the spread of net assets, which includes the
geographic distribution of the investments and the net currency
position, give an insight into the actual risks at balance-sheet
date.
Risk management
Managing risk is a part of the investment process as a whole and with
the help of advanced systems, the risks outlined above are limited,
measured and monitored on the basis of fixed risk measures.
Policy regarding the use of derivative instruments
Investing implies that positions are taken. As it is possible to use
various (derivative) instruments to construct an identical position,
the selection of derivatives is subordinate to the positioning of a
portfolio. In our published information, attention is given primarily
to the overall position, and secondarily to the nature and volume of
the financial instruments employed.
Derivative instruments
The market value of derivatives is reported in the Balance sheet
under Financial investments. Liabilities and receivables and the
values of derivatives' underlying instruments are not included in the
Balance sheet. They are, however, explained under the heading
Commitments not shown in the balance sheet.
NOTES TO THE BALANCE SHEET
1 Bonds and other fixed-income securities
+-------------------------------------------------------------------+
| Movements in bonds and other fixed-income securities |
|-------------------------------------------------------------------|
| EUR x 1 million | 2004 | 2003 | |
|-------------------------------------------+---------+---------+---|
| | | | |
|-------------------------------------------+---------+---------+---|
| Book value (market value) at opening date | 3,471 | 4,198 | |
|-------------------------------------------+---------+---------+---|
| Purchases | 17,566 | 17,931 | |
| | | | |
|-------------------------------------------+---------+---------+---|
| Sales | -18,223 | -18,471 | |
|-------------------------------------------+---------+---------+---|
| Realized and unrealized results: | | | |
|-------------------------------------------+---------+---------+---|
| stocks | 68 | 108 | |
| | | | |
|-------------------------------------------+---------+---------+---|
| currencies | -75 | -295 | |
| | | | |
|-------------------------------------------+---------+---------+---|
| | ______ | ______ | |
|-------------------------------------------+---------+---------+---|
| Book value (market value) at closing date | 2,807 | 3,471 | |
+-------------------------------------------------------------------+
The spread of the portfolio is shown at the end of this report. A
substantial part (79%; previous year also 79%) of the total purchases
and sales shown in the table relates to repo transactions. Repo
transactions current at balance-sheet date represent a value of EUR
611 million (previous year EUR 1,169 million).
At balance-sheet date, bonds to the amount of EUR 506 million
(EUR 649 million at the end of last year) had been lent. To cover the
risk of non-restitution, adequate collateral was demanded and
obtained; this collateral is not included in the Balance sheet.
2 Derivatives
Survey of movements in derivatives
EUR x 1 million TBAs Forward Futures Interest-rate Total
exchange swaps
transactions
______________ ______________ ______________ ______________ ______________
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
Book value 4 64 20 40 -6 -45 3 3 21 62
(market value) at
opening date
Sales/expirations -16 -12 -5 -122 46 63 -2 - 23 -71
Realized and 14 -48 7 102 -36 -24 -1 - -16 30
unrealized
results:
_______ ______ ______ ______ ______ ______ ______ ______ ______ ________
Book value 2 4 22 20 4 -6 - 3 28 21
(market value) at
closing date
3 Deposits
EUR 303 million of this amount relates to repo transactions (previous
year EUR 953 million).
Survey of movements in deposits
EUR x 1 million 2004 2003
Situation at opening date 1,007 632
Balance advances and redemptions -712 394
Realized and unrealized results 8 -19
_______ ______
Book value (market value) at closing date 303 1,007
4 Other financial investments
Includes certificates of deposit, commercial paper and call money.
EUR 315 million of this amount relates to repo transactions (previous
year EUR 222 million).
Survey of movements in other financial investments
EUR x 1 million 2004 2003
Situation at opening date 222 105
Balance advances and redemptions 216 129
Realized and unrealized results -14 -12
_______ ______
Book value (market value) at closing date 424 222
5 Receivables on affiliated companies
A subordinated loan of EUR 26 million has been granted to one of the
companies of the Robeco Group for an indefinite term. This loan
cannot be canceled without the consent of De Nederlandsche Bank N.V.
6 Sundry debtors
Includes suspense items.
7 Payable on securities transactions
EUR 611 million of this amount relates to current repo transactions
(previous year EUR 1,169 million).
8 Sundry creditors
Includes unpaid tax and expenses.
9 Investments in Robeco Group mutual funds
Part of the portfolio is invested in funds offered by the Robeco
Group; these investments are reported under Bonds and other
fixed-income securities. A list of these investments is given below.
+-----------------------------------------------------------------------------+
|Investments in Robeco Group mutual funds | |
|-----------------------------------------------------------------------------|
| | | | | | | |
|-+-------------+-------------------------------------------------------------|
| | | Market value|Interest in| Net asset| Return| Total|
| | | | fund| value 1) | | expense|
| | | | | | | ratio 2)|
|-+-------------+---------------+-----------+-------------+---------+---------|
| | | EUR| In %| EUR x 1| In %| In %|
|-+-------------+---------------+-----------+-------------+---------+---------|
| | | 31/12| 31/12|31/12|31/12| 31/12| 31/12| | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| | | 2004| 2003| 2004| 2003| 2004| 2003|2004|2003|2004|2003|
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| |Funds | | | | | | | | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| |Robeco | | | | | | | | | | |
| |Institutional| 111| 122| 26.3| 26.7|110.83|106.86|11.8|26.6|0.51|0.51|
| |Global High | | | | | | | | | | |
| |Yield | | | | | | | | | | |
| |vastrentende | | | | | | | | | | |
| |waarden Fonds| | | | | | | | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| |Robeco | | | | | | | | | | |
| |Institutional| 42| 48| 42.3| 64.1| 98.02|104.50|-6.2| 0.3|1.05|1.02|
| |Global Money | | | | | 3)| 3)| | | | |
| |Market | | | | | | | | | | |
| |Opportunity | | | | | | | | | | |
| |Fund | | | | | | | | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| | |_______|_______| | | | | | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| | | 152| 170| | | | | | | | |
|-+-------------+-------+-------+-----+-----+------+------+----+----+----+----|
| | | | | | | | | | | | |
|-+---------------------------------------------------------------------------|
| |1) Per 100 participating units |
| |2) Regarding management costs, agreements have been made with the |
| |managers of the funds concerned for the restitution of management costs to |
| |Rorento N.V. |
| |3) In USD. |
|-+---------------------------------------------------------------------------|
| | |
+-----------------------------------------------------------------------------+
The annual reports of the abovementioned Robeco Group funds as of 31
December 2004 are available at the company's offices on request. The
funds are not regulated.
Rorento N.V. can enter and exit the abovementioned Robeco Group
mutual funds on a daily basis at net asset value. These funds do not
have an entry charge and have an exit charge of 0.125%, as included
in the Terms and Conditions of Management and Custody of the said
funds.
10 Shareholders' equity
Composition and development of shareholders'
equity
EUR x million 2004 2003
Issued capital
Situation at opening date 283 345
Received on shares issued 13 5
Paid for shares repurchased -63 -67
_______ _______
Situation at closing date 233 283
Share premium reserve
Situation at opening date - 276
Received on shares issued - 17
Paid for shares repurchased - -293
_______ _______
Situation at closing date 0 0
Other reserves
Situation at opening date 3,333 3,605
Adjustment due to system change - 94
_______ _______
3,333 3,699
Received on shares issued 164 51
Paid for shares repurchased -769 -519
Net result from previous financial year 59 102
_______ _______
Situation at closing date 2,787 3,333
Net result 98 59
_______ _______
Shareholders' equity 3,118 3,675
The company's authorized share capital amounts to EUR 900 million,
divided into 300,000,000 ordinary shares with a nominal value of EUR
3 each.
11 Assets, shares outstanding and per share value
Assets, shares outstanding and per share value
31/12/2004 31/12/2003 31/12/2002
Assets (EUR x million) 3,118 3,675 4,421
Shares issued in financial year 4,450,561 1,859,037 3,538,888
Shares repurchased in financial -20,910,312 -22,477,969 -28,097,306
year
Number of shares outstanding 77,737,554 94,197,305 114,816,237
Net asset value per share in EUR 40.10 39.02 38.51
12 Commitments not shown in the balance sheet
Forward exchange transactions
The forward exchange transactions current at closing date represent
purchases of AUD 10 million, CHF 0.4 million, DKK 77 million and
EUR 458 million and KRW 25,588 million, against sales of CAD 9
million, GPB 54 million, JPY 1,903 million and USD 514 million. The
effect of these transactions on the currency position is shown in the
survey Spread of net assets at the end of this report.
Futures
Futures contracts purchased as at balance sheet date represent an
increase in assets invested of CAD 5 million, EUR 447 million, GBP 4
million and JPY 22 billion; futures contracts sold represent a
decrease in assets invested of USD 2.4 billion.
Interest-rate swaps
No interest-rate swap contracts were open at balance-sheet date.
Mortgage-backed securities (TBAs)
Forward purchases of mortgage-backed securities current at
balance-sheet date represent a sum of USD 543 million.
Futures contracts, interest-rate swaps and mortgage-backed securities
are included in the survey of Modified duration in the report of the
management board. Unrealized results of these transactions at closing
date are included in the Profit and loss account.
NOTES TO THE PROFIT AND LOSS ACCOUNT
13 Performance
+-------------------------------------------------------------------+
| Performance | | | | | |
|----------------+----------+---------+---------+---------+---------|
| EUR 1 per | 2004 | 2003 | 2002 | 2001 | 2000 |
| share | | | | | |
|----------------+----------+---------+---------+---------+---------|
| | | | | | |
|----------------+----------+---------+---------+---------+---------|
| Investment | 1.56 | 1.69 | 1.73 | 2.66 | 3.87 |
| income | | | | | |
|----------------+----------+---------+---------+---------+---------|
| Change in | | | | | |
| value due to | -0.15 | -0.87 | -0.71 | -0.20 | 1.27 |
| capital | | | | | |
| results and | | | | | |
| other | | | | | |
| variances | | | | | |
|----------------+----------+---------+---------+---------+---------|
| Management | 0.26 | 0.24 | 0.22 | 0.22 | 0.27 |
| costs | | | | | |
|----------------+----------+---------+---------+---------+---------|
| | _______ | _______ | _______ | _______ | _______ |
|----------------+----------+---------+---------+---------+---------|
| Net result | 1.15 | 0.58 | 0.80 | 2.24 | 2.33 |
|-------------------------------------------------------------------|
| *) Based on the average amount of shares outstanding during the |
| reporting year. The average amount of shares outstanding is |
| calculated on a daily basis for the years 2004 and 2003 and on a |
| monthly basis for the preceding years. |
| |
| |
+-------------------------------------------------------------------+
COSTS
14 Total expense ratio
Total expense ratio
2004 2003
in% in%
Cost item
Management costs 0.63 0.60
Service fee 0.01 -
Other expenses 0.01 0.02
_______ _______
Total 0.65 0.62
The total expense ratio expresses the costs charged to the fund
during the reporting period as a percentage of the average assets
entrusted during the reporting period. The total expense ratio as
shown does not include transaction costs. The total expense ratio was
0.65% during the reporting period. With the exception of costs
relating to investments and taxes, the management costs relate to all
the fund's costs and all costs resulting from the management of the
fund. The service fee covers the administration, the costs of the
external auditor, other external advisers, regulators, costs relating
to reports required by law, such as the annual and semiannual
reports, and the costs relating to the meetings of shareholders.
The total expense ratio takes into account the costs of intra-group
investments, as presented in the table on page 19; as the management
fee is restituted to Rorento, these costs are not material and are
therefore not included in the above table.
Other costs mainly relate to the custody fee charged by third parties
for the custody of the fund's securities portfolio.
15 Management costs and service fee
It is the Robeco group's policy to present the costs of its funds as
transparently as possible, furthermore Robeco aims at a cost level
more or less equal to the average of the European market, combined
with high-level service and advice.
With effect from 1 October 2004, the management fee on the average
assets entrusted has been raised from 0.60% to 0.70% a year, to bring
it more in line with the market. Furthermore, a service fee was
introduced to cover formal and operational costs such as the
production of annual reports and the fund's administration. It is
market practice to directly charge these costs to the fund. The
Robeco Group has chosen to charge a fixed annual fee to cover these
expenses to make the actual costs transparent to its clients. The
service fee for Rorento N.V. will be 0.12% per year. For assets
exceeding EUR 1 billion the service fee is 0.10%; for assets
exceeding EUR 5 billion the service fee is 0.08%. The fees are
calculated on a daily basis, based on the average assets entrusted.
Before 1 October 2004 the average assets entrusted was calculated on
an annual basis, based on 13 observations.
16 Securities lending
Robeco Securities Lending B.V. is the intermediary for all Rorento
N.V.'s securities-lending transactions. As compensation for its
services Robeco Securities Lending B.V. receives a fee of 40% of the
gross income resulting from these securities-lending transactions.
17 Other costs
This includes custody costs and bank charges.
18 Performance fee
Rorento N.V. does not charge a performance fee.
19 Transaction costs
Brokerage costs and exchange fees relating to investment transactions
are discounted in the sots price or the sales value of the
investment. Brokerage costs for the purchase and sale of bonds are
included in the share price and cannot be quantified separately.
These costs and fees are charged to the result.
20 Turnover ratio
This is the turnover ratio of the investments against the average
assets entrusted and this is a measure of the incurred transaction
costs resulting from the portfolio policy pursued and the ensuing
investment transactions. In the calculation method that is used the
amount of turnover is determined by the sum of purchases and sales of
investments less the sum of issuance and repurchase of own shares. If
the outcome is negative, the turnover ratio is 0. The turnover ratio
is determined by expressing the amount of turnover as a percentage of
the average assets entrusted. The turnover ratio is corrected for
repo transactions, which are not part of the portfolio policy but
generate extra return on the portfolio. The turnover ratio excluding
repo transactions was 193% for 2004 (versus 168% for the previous
year). Rorento's turnover in 2004 was slightly higher than in 2003.
This was partly due to the reduction of the considerable overweight
in corporate bonds in the second half of 2004. Furthermore, the
number of active (overweight and underweight) positions, taken
throughout a year, effects the fund's total turnover. In this respect
2004 was a fairly normal year, which did not differ much from 2003.
21 Transactions with affiliated parties
Part of the transaction volume over the reporting period relates to
transactions with affiliated parties. The table below shows the
various types of transactions where this was the case.
Transaction type Part of the total volume in %
2004 2003
Bonds 30.0 4.8
Forward exchange transactions 5.4 7.5
Call money 0.0 25.5
Deposits 3.6 4.7
22 Personnel costs
Rorento N.V. does not employ personnel.
Robeco Nederland B.V.'s remuneration policy for fund managers
consists of both a fixed and a variable income. The secondary
conditions of employment are in line with what is common practice in
the financial-services industry.
The fixed income offers a good and competitive remuneration basis
within the Dutch asset-management market. A fund manager is assigned
to a salary scale with a minimum and maximum income based on the
level of responsibility of his function (HAY method for function
valuation). Growth within this scale is linked to (performance)
results and competencies.
The variable income offers the fund manager remuneration for his
individual, long-term outperformance. Payment is related to the
outperformance relative to a preset target.
The track record over both a 1-year and 3-year period is taken into
account when determining the variable remuneration. The variable
remuneration to which the fund manager is entitled for any single
year is paid out over a 3-year period (60% in the first year, 30% in
the second and 10% in the last year).
23 Supervisory directors' fee
An amount of EUR 34,598 (previous year EUR 37,434) has been allocated
from the proposed profit appropriation for this purpose.
Philipsburg, 11 March 2005
The supervisory board
P.C. van den Hoek, chairman
G. Izeboud
J. Kremers
D.P.M. Verbeek
The management board
E.J. Siermann, chairman
F.L.E.G. Boll
K.J.V. Tavernier
OTHER DATA
Stock-exchange listing
The ordinary shares of Rorento N.V. are listed on the Official Market
of Euronext Amsterdam Stock Market N.V. In addition, Rorento has a
stock-exchange quotation in Paris, Brussels, Luxembourg, London,
Berlin, Dusseldorf, Frankfurt, Hamburg, Munich, Vienna and Zurich.
Articles of Association rules regarding profit appropriation
According to articles 39 and 40 of the Articles of Association, the
profit less allocations to the reserves deemed desirable by the
management board in agreement with the supervisory board will be at
the disposal of the General Meeting of Shareholders.
Proposed profit appropriation
As last year, it will be proposed to the General Meeting of
Shareholders not to distribute a dividend but to allocate the profit,
less remuneration to supervisory directors, to Other reserves.
Joint interest of directors
Statement pursuant to article 21, paragraph 2, section a, of the
Dutch Investment Institutions Supervision Decree ('Btb', Besluit
toezicht beleggingsinstellingen).
Pursuant to section b of the circular 'Publication of interests of
directors' of 15 October 1993, exemption has been granted in respect
of the prescribed publication of interests in bonds - with the
exception of convertible bonds - listed on a stock exchange or traded
in another regular and officially recognized open market, held by the
members of the management and supervisory boards. Since no
convertible bonds were held in the portfolio, on the basis of this
exemption there is no requirement to include further information in
this report.
Joint interests of directors in Rorento N.V.
At 31 December 2004, supervisory and managing directors held a joint
interest of 0 and 294 Rorento N.V. shares respectively. At end 2004,
no options had been granted to supervisory directors.
Aon Risk Services International, of which Dirk. P.M. Verbeek is a
director, acted as an intermediary in various insurance policies
concluded at Rabobank Group level, including a Bankers, General
Liability and D&O liability policy. Furthermore Aon Risk Services
International insures several of Robeco's art objects. Apart from the
above, there were no other business relations between supervisory
directors and the company than that of member of the supervisory
board during the period under review.
Interests of the fund manager
In general, the fund manager should always act in accordance with
Dutch legislation and, insofar as relevant, legislation in other
countries. As an employee of Robeco Nederland B.V. he is bound by
Robeco's internal regulations and procedures, including the Rules and
regulations regarding private investment transactions, which are
based on, and conform as closely as possible to, the Dutch Securities
Transactions Supervision Act. These Rules should guarantee that the
(semblance of) insider trading and mixing of business and private
interests is avoided at all times. According to these Rules a fund
manager should be considered as an insider.
As at 31 December 2004 the fund manager had an interest of 32 Rorento
N.V. shares. At the same date, she held no interests in Rorento N.V.
investments.
Interests of major investors
Statement in conformity with article 21, paragraph 2, sections b and
c, of the Dutch Investment Institutions Supervision Decree (Btb,
Besluit toezicht beleggingsinstellingen).
The company knows of only one party to be considered a major investor
within the meaning of the Btb, namely Stichting Aandelen-Rekeningen
Robeco-Groep. During the period under review, no transactions as
referred to in article 21, paragraph 2, section c, of the Btb took
place.
Statement for the London Stock Exchange
The members of the supervisory board and the management board of
Rorento N.V. hereby declare that their beneficial interests and those
of their children below the age of 18 years do not in the aggregate
exceed 5% of the company, in respect of either share capital or
voting control.
Philipsburg, 11 March 2005
Auditor's report
Introduction
We have audited the financial statements of Rorento N.V., Philipsburg
for the year 2004. These annual financial statements are the
responsibility of the company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
Scope
We conducted our audit in accordance with auditing standards
generally accepted in the Netherlands. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant
estimates made by the management board, as well as evaluating the
overall financial statements. We believe that our audit provides a
reasonable basis for our opinion.
Opinion
In our opinion, the financial statements give a true and fair view of
the company's financial position as at 31 December 2004 and of the
result for the year then ended in accordance with accounting
principles generally accepted in the Netherlands and comply with the
financial reporting requirements included in Part 9, Book 2 of the
Dutch Civil Code and the Dutch Investment Institutions Supervision
Act.
Philipsburg, 11 March 2005
Ernst & Young Accountants
SPREAD OF NET ASSETS
Across countries Across currencies
_______________________________________________ _______________________________
31/12/2004 31/12/2004 31/12/2003 31/12/2004 31/12/2003
EUR x million in % in % in % in %
Long-term
investments
North
America
(31.1%)
US dollar 935 30.0 32.2 12.0 13.7
Canadian 34 1.1 0.9 1.9 1.9
dollar
Europe
(49.5%)
Euro 1,387 44.5 38.0 70.8 73.5
British 148 4.7 3.4 2.2 1.7
pound
Swedish 9 0.3 0.2 0.2 0.2
krona
Danish - - - 0.3 0.3
krone
Swiss franc - - - 3.1 -
Asia (9.4%)
Japanese 294 9.4 5.2 9.2 7.8
yen
Korean won - - - 0.3 0.3
Australia
(0.0%)
Australian - - 5.8 - 0.3
dollar
New Zealand - - 4.8 - -
dollar
South
Africa
(0.0%)
South - - 3.9 - 0.3
African
rand
Short-term 311 10.0 5.6 - -
investments
(10.0%)
________ ________ ________ ________ ________
Total 3,118 100.0 100.0 100.0 100.0
Exchange rates
31/12/2004 31/12/2003 31/12/2004 31/12/2003
EUR 1 EUR EUR
AUD 1.740 1.6741 AUD 1 0.5767 0.5973
CAD 1.6286 1.6300 CAD 1 0.6140 0.6135
DKK 7.4386 7.4459 DKK 1 0.1344 0.1343
GBP 0.70795 0.7046 GBP 1 1.4125 1.4192
HUF 245,650 261.6250 HUF 1 0.0041 0.0038
JPY 139.2824 135.1789 JPY 100 0.7180 0.7398
KRW 1,407.0957 1.502.8986 KRW 100 0.0711 0.0665
NZD 1.8818 1.9212 NZD 1 0.5314 0.5205
SEK 9.0327 9.0744 SEK 1 0.1107 0.1102
USD 1.35925 1.2614 USD 1 0.7357 0.7928
ZAR 7.6577 8.4195 ZAR 1 0.1306 0.1188
BOND PORTFOLIO
At 31 December
2004
Expiration
Market value % date
USD
333,441 0.0000 Solstice ABS (FRN) 02-05-36
Robeco Institutioneel Global Money
57,127,241 0.0000 Market Opportunity Fund
3,658,400 0.0000 Robeco CBO I (ANN) 21-06-12
23,791,680 1.8750 US Treasury Note 31-12-05
12,354,000 2.0000 United States 15-05-06
1,400,809 2.1200 Credit Agricole (FRN) 17-07-06
Bos Intermational
9,990,500 2.1450 Australia (FRN) 16-04-09
10,013,300 2.1600 JP Morgan Chase (FRN) 02-10-09
HBOS Treasury
10,007,000 2.1900 Services (FRN) 22-01-08
10,011,000 2.1988 Lehman Brothers (FRN) 20-04-07
7,511,775 2.2000 Goldman Sachs 09-01-07
10,976,790 2.2500 John Hancock (FRN) 27-04-09
2,505,050 2.2588 Goldman Sachs (FRN) 20-04-06
BCP Finance Bank
1,500,216 2.2600 (FRN) 26-01-05
Banque Federative du
10,004,215 2.2800 Credit (FRN) 30-01-06
400,100 2.3194 Bank of America (FRN) 28-04-05
10,008,500 2.3300 Morgan Stanley (FRN) 22-01-09
14,392,692 2.3750 United States 15-08-06
11,881,560 2.3750 US Treasury Note 31-08-06
Bear Stearns Cos
1,003,060 2.4300 (FRN) 30-01-09
Caymadrid
3,961,693 2.4525 International (FRN) 28-11-05
1,001,150 2.4600 Merrill Lynch (FRN) 06-02-09
Discover Card Master
3,000,000 2.4725 Trust (FRN) 15-07-07
American Express
10,005,000 2.4875 Credit (FRN) 14-09-07
1,681,058 2.4900 Aegon (FRN) 13-05-05
1,000,810 2.4900 Citigroup 15-02-07
Westdeutsche
17,017,113 2.4900 Landesbank (FRN) 29-05-07
Permanent Financing
6,004,920 2.4950 (FRN) 10-06-07
25,011,500 2.4975 Citigroup (FRN) 04-06-07
10,012,048 2.5000 BES Finance (FRN) 17-11-05
1,001,440 2.5000 Citigroup (FRN) 01-09-06
First National Master
5,004,688 2.5025 No (FRN) 15-08-08
Sears Credit Account
2,999,063 2.5025 Master (FRN) 18-02-09
25,075,000 2.5100 Deutsche Finance 02-03-06
Credit Suisse First
6,001,326 2.5106 Boston (FRN) 27-02-06
American Express
2,004,375 2.5125 Credit (FRN) 15-09-10
1,001,300 2.5400 Istitut Bancario 27-02-06
25,018,500 2.5500 ASIF Global (FRN) 11-12-06
Monumental Global
20,079,350 2.5500 Funding (FRN) 08-05-06
9,626,880 2.5600 Bank of America (FRN) 22-11-06
Wells Fargo & Co.
3,754,725 2.5600 (FRN) 12-06-06
10,011,200 2.5650 Dresdner bank (FRN) 07-03-06
Westdeutsche
6,507,150 2.5850 Landesbank (FRN) 10-03-09
25,006,250 2.5900 HSBC Bank US (FRN) 21-09-07
Wells Fargo & Co
21,263,762 2.5900 (FRN) 15-09-09
MBNA Master Credit
250,313 2.6400 Card (FRN) 15-07-08
MBNA Master Credit
7,019,688 2.6625 Card (FRN) 15-08-08
10,014,000 2.7000 IKB Deutschland (FRN) 30-06-06
10,013,000 2.7100 Merrill Lynch (FRN) 09-09-09
Bear Stearns Cos
9,007,740 2.7200 (FRN) 09-09-09
9,006,930 2.7400 CIT Group (FRN) 20-09-07
1,501,777 2.7400 Merrill Lynch (FRN) 19-06-06
29,871,726 2.7500 US Treasury Note 15-08-07
Countrywide Home Loan
9,947,520 2.8900 (FRN) 02-06-06
General Electric
10,067,000 2.9200 Capital (FRN) 13-12-06
2,112,500 2.9375 Stuyvesant CDO (FRN) 22-08-13
53,273,883 3.1250 US Treasury Note 15-05-07
4,812,500 3.3500 Stuyvesant CDO (FRN) 07-04-14
91,554,540 3.3750 US Treasury Note 15-09-09
Countrywide
21,567,295 3.5000 Financial 19-12-05
1,146,029 4.2500 Korea 01-06-13
32,581,250 4.2500 United States 15-11-14
17,419,354 4.7500 Goldman Sachs 15-07-13
39,863,219 5.0000 Citigroup 15-09-14
Rabobank Capital Fund
19,841,055 5.2600 II Tier I 31-12-13
Nationalwide Life GBL
16,907,919 5.3500 Fund 15-02-07
22,162,345 5.3750 United States 15-02-31
Countrywide
6,765,328 5.5000 Financial 01-08-06
General Electric
6,104,849 5.8750 Capital 15-02-12
General Electric
4,437,277 6.0000 Capital 15-06-12
6,618,644 6.0000 Glencore Fund 15-04-14
5,678,212 6.0000 N R U C 15-05-06
2,630,166 6.2500 United States 15-05-30
AIG Sunamerica Global
16,911,113 6.3000 Finance VI 10-05-11
12,216,770 6.3750 Tyco International 15-10-11
31,942,386 6.7500 JP Morgan Chase 01-02-11
755,820 6.8750 United States 15-08-25
Oncor Electric
14,860,640 7.0000 Delivery 01-09-22
10,517,516 7.0000 Philip Morris 04-11-13
Standard Credit Card
209,920 7.2500 Master Trust 07-04-08
31,797,018 7.3750 Ford Motor Credit 28-10-09
11,100,000 7.3750 Pemex Finance 15-12-14
9,013,013 7.4500 Ford Motor Credit 16-07-31
3,362,956 7.5000 Malaysia 15-07-11
John Hancock Global
15,843,224 7.5000 Fund 31-01-05
Santander Central
23,341,200 7.6250 Hispano Issue 14-09-10
9,348,160 7.6250 Hilton Hotels 01-12-12
21,694,471 7.7500 CIT Group 02-04-12
14,837,598 7.7500 Verizon Global FDG 01-12-30
Credit Suisse First
11,688,905 7.9000 Boston Tier I 01-05-07
National Rural
11,597,323 8.0000 Utilities 01-03-32
14,823,750 8.0000 Telus 01-06-11
1,182,260 8.2500 Hilton Hotels 15-02-11
UBS PFD Funding Trust
22,730,892 8.6220 I Tier I 01-10-10
6,221,245 8.6250 Stageco Holdings 15-11-09
1,661,268 8.7500 Malaysia 01-06-09
CAD
41,565,600 5.7500 Canada 01-06-29
13,597,740 5.7500 Canada 01-09-06
EUR
411 0.0000 Germany JA07 04-01-07
Institutional Global High Yield
110,947,436 0.0000 Vastrentende Waarden Fonds
87,086,311 3.5000 France 12-01-08
Rodamco Europe
11,560,836 3.7500 Finance 01-07-10
MBNA Credit Card
2,546,163 4.1500 Master Note 19-04-10
77,968,095 4.2500 France 25-04-19
25,133,440 4.2500 Germany 04-01-14
Holcim Finance
7,356,239 4.3750 Luxembourg 23-06-10
11,789,080 4.3750 JP Morgan Chase 12-11-14
3,140,910 4.5000 Germany 17-08-07
10,534,990 4.5000 Rolls-Royce 16-03-11
9,049,976 4.6250 Renault 28-05-10
12,550,129 4.6250 Anglian Water 07-10-13
14,421,089 4.6250 Bank of America 18-02-14
11,611,164 4.6250 Technip 26-05-11
10,204,545 4.6250 Dow Chemical 27-05-11
12,023,271 4.6250 Arcelor Finance 07-11-14
4,092,699 4.7500 Depfa Pfandbriefbank 16-07-07
18,941,129 4.7500 Goldman Sachs 28-01-14
17,255,865 4.7500 SLM 17-03-14
11,307,276 4.7500 ISS Global 18-09-10
12,542,670 4.7810 Allied Irish Bank 17-12-14
British American
15,257,638 4.8750 Tobacco Finance 25-02-09
6,251,544 4.8750 Soci�t� G�n�rale 18-12-14
Volkswagen Financial
5,418,998 4.8750 Service 22-05-13
10,634,309 4.8750 Barclays 15-12-14
9,814,941 4.8750 Gecina 25-01-12
31,426,288 5.0000 France 25-04-12
13,579,475 5.0000 Autostrade 09-06-14
6,590,781 5.0000 Lafarge 16-07-14
5,215,750 5.1250 Telef�nica De Espana 30-10-06
12,658,863 5.1250 Stora Enso 23-06-14
12,201,464 5.1250 Wolters Kluwer 27-01-14
11,975,264 5.1250 Altadis Finance 02-10-13
86,761,188 5.2500 Germany 04-01-11
Federal Home Loan
6,811,252 5.2500 Mortgage 15-01-06
15,621,140 5.2500 New York Life Funding 16-02-09
HSBC Capital Funding
15,820,268 5.3687 LP 24-03-14
Monumental Global
14,302,155 5.3750 Funding 13-03-09
6,447,578 5.3750 International Endesa 21-02-13
Glencore Finance
5,817,806 5.3750 Europe Lux 30-09-11
9,731,972 5.4480 Lafarge 04-12-13
18,704,041 5.5000 Belgium 28-03-28
39,244,765 5.5000 Germany 04-01-31
12,695,793 5.5000 Pacific Life Funding 14-05-09
6,771,625 5.5430 BCP Finance bank 09-06-14
Lloyds Bank Upper
12,167,463 5.6250 Tier II 15-07-09
12,076,762 5.7500 Achmea Hypotheek bank 30-07-08
E.ON International
19,197,768 5.7500 Finance 29-05-09
9,962,370 5.8750 Autostrade 09-06-24
1,399,775 6.0000 Netherlands 15-01-06
Repsol International
12,949,776 6.0000 Finance 05-05-10
7,023,125 6.0000 Peugeot 19-09-33
14,237,580 6.1000 Fortum 19-02-08
Lehman Brothers
16,836,593 6.1250 Holdings 23-03-07
9,286,418 6.1250 UPM-Kymmene 23-01-12
93,344,745 6.2500 Belgium 28-03-07
4,395,560 6.2500 Household Finance 21-09-05
6,443,599 6.2500 BES Finance 17-05-11
16,035,378 6.2500 ING Groep 21-06-21
18,968,745 6.3500 Capital Instruments 30-06-14
Pemex Project Funding
4,002,660 6.3750 Master 05-08-16
35,494,644 6.5000 Greece 11-01-14
19,299,504 6.5000 Fortis NL Tier I 26-09-11
12,154,320 6.5000 Hilton Group 17-07-09
North West Water
20,546,812 6.6250 Group 08-11-07
BNP Paribas Capital
13,716,632 6.6250 Trust Tier I 23-10-11
9,890,193 6.7500 Ford Motor Credit 14-01-08
Intesabci Capital
8,660,960 6.9880 Trust Tier I 12-07-11
CL Capital Trust 1
16,802,325 7.0470 Tier I 26-04-12
Union Bank of Norway
11,114,430 7.0680 Tier I 19-11-12
Deutsche Telekom Int.
16,223,625 7.1250 Finance 11-07-11
10,545,427 7.2500 Sogerim 20-04-11
19,470,240 7.2500 France Telecom 28-01-13
Deutsche Telekom Int.
6,854,400 7.5000 Finance 24-01-33
Halifax Group Euro
16,336,128 7.6270 Finance Tier I 09-12-11
Olivetti
9,294,300 7.7500 International Finance 24-01-33
8,635,968 8.1260 Sanpaolo Tier I 10-11-10
Standard Chartered
12,569,260 8.1600 Bank Tier I 23-03-10
KBC Bank Funding
8,987,755 8.2200 Trust IV Tier I 10-11-09
GBP
9,624,483 4.2500 United Kingdom 07-06-32
15,441,900 5.0000 United Kingdom 07-03-12
4,221,240 5.7500 United Kingdom 07-12-09
7,782,390 5.9021 Aviva 27-07-20
23,304,640 6.0000 United Kingdom 07-12-28
40,133,308 7.2500 United Kingdom 07-12-07
4,288,456 7.5000 United Kingdom 07-12-06
SEK
80,717,660 6.7500 Sweden 05-05-14
DEM
9,845,000 2.3459 GMAC Canada (FRN) 28-04-05
JPY
Credit Foncier de
4,023,200,000 0.4000 France 22-09-06
3,024,120,000 0.7000 Canada 20-03-06
Bank Nederlandse
1,117,017,000 0.8000 Gemeenten 22-09-08
Japan Development
4,251,850,200 1.0500 Bank 20-06-23
Japan Finance Corp
5,925,150,000 1.5500 for Munici 21-02-12
Japan Development
2,401,750,000 1.7000 Bank 20-09-22
Japan Development
6,445,443,000 1.7500 Bank 21-06-10
8,563,077,000 1.8000 Italy 23-02-10
European Investment
5,222,973,000 3.0000 Bank 20-09-06
USD Emerging debts
173,600 0.0000 Argentina 04-12-05
340,000 0.0000 Argentina 07-04-09
676,260 0.0000 Argentina 15-06-15
419,048 0.0000 Bulgaria (FRN) 28-07-12
3,106 0.0000 Argentina 19-12-08
643,333 2.7500 Panama IRB 17-07-14
930,000 3.0000 Russia 14-05-08
288,720 3.0625 Brazil 15-04-06
589,855 3.1250 Brazil 15-04-12
1,620,000 4.0000 Poland PAR 27-10-24
1,122,000 4.5000 Peru FLIRB 07-03-17
7,205,590 5.0000 Russia 31-03-30
736,246 5.5000 Chile 15-01-13
1,127,500 5.8750 Mexico 15-01-14
1,380,000 6.2500 Nigeria 15-11-20
1,697,033 6.5000 South Africa 02-06-14
1,002,249 6.8750 Chili 28-04-09
916,938 7.5000 Mexico 08-04-33
1,078,000 7.5000 Uruguay 15-03-15
639,000 7.6500 Ukraine 11-06-13
798,408 8.0000 Brazil 15-04-14
954,250 8.0000 Ecuador 15-08-30
633,000 8.1250 Panama 28-04-34
2,355,000 8.1250 Mexico 30-12-19
1,883,100 8.2500 Bulgaria 15-01-15
367,500 8.3750 Philippines 12-03-09
1,963,898 8.3750 Philippines 15-02-11
1,698,400 8.5000 Venezuela 08-10-14
360,750 8.7500 Egypt 11-07-11
545,000 8.7500 Peru 21-11-33
822,808 8.7500 Russia 24-07-05
656,190 8.8750 Brazil 15-04-24
498,375 8.8750 Panama 30-09-27
417,500 9.0400 Dominican Republic 23-01-13
1,430,910 9.1250 Peru 21-02-12
2,643,750 9.2500 Venezuela 15-09-27
364,875 9.3750 Philippines 18-01-17
942,000 9.6250 Panama 08-02-11
2,167,900 9.7500 Colombia 23-04-09
1,716,312 9.8750 Turkey 23-02-05
791,000 10.0000 Russia 26-06-07
2,934,000 10.3750 Mexico 17-02-09
2,137,500 10.6250 Philippines 16-03-25
1,215,000 11.0000 Brazil 11-01-12
1,186,000 11.0000 Brazil 17-08-40
1,728,750 11.2500 Brazil 26-07-07
643,750 11.5000 Turkey 23-01-12
2,452,000 11.5000 Mexico 15-05-26
1,158,750 11.7500 Colombia 25-02-20
2,398,750 11.7500 Turkey 15-06-10
2,163,750 11.8750 Turkey 15-01-30
717,500 12.0000 Ecuador 15-11-12
1,322,500 12.2500 Brazil 06-03-30
1,146,250 12.7500 Russia 24-06-28
800,400 14.5000 Brazil 15-10-09
EUR Emerging debts
313,500 5.0000 Morocco 08-07-08
1,266,000 6.7500 South Africa 19-05-06
561,750 7.3750 Mexico 13-03-08
701,938 8.5000 Romania 08-05-12
647,635 10.0000 Ukraine 15-03-07
321,150 11.2500 Colombia 20-10-05
834,750 11.3750 Colombia 31-01-08
1) Robeco (Schweiz) AG, Uraniastrasse 12, CH-8001 Zurich, is the
fund's appointed representative in Switzerland. Copies of the
prospectus, Articles of Association, (semi)annual reports and a list
of all purchases and sales in the fund's securities portfolio during
the reporting period are available from the above address free of
charge. UBS AG, Bahnhofstrasse 45, CH-8098 Zurich, is the fund's
paying agent in Switzerland.
* Modified duration is a measure of the interest-rate sensitivity and
interest-rate risk of a portfolio, and represents the approximate
percentage change in the value of the portfolio as a result of a 1
percent increase or decrease in interest rates. The use of derivative
instruments allows the amount of the portfolio's modified duration to
be managed separately from the direct bond investments. The
application of derivatives therefore allows the fund to adopt an
optimal yield-curve positioning. The use of derivative instruments is
limited to the setting of limits for the total modified duration of
the portfolio.
Ronald Florisson, Corporate Communications Robeco
Office +31 - 10 - 224 28 10
Mobile +31 - 653 - 831 586
E-mail: ronald.florisson@robeco.nl
- ---END OF MESSAGE---
Copyright � Hugin ASA 2005. All rights reserved.
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