Fund

AXIOMA Leveraged Bond Fund

AXIOMA Leveraged Bond Fund

Performance

January 2020
  • Growth of $100 investment
  • Monthly return

Period

Performance, per period *The percentage of Not Rated bonds as of 31.01.2020 is 0.5%.

Historical volatility4.34
1M1.33
3M2.89
YTD1.33
201914.80
2018-1.84
201710.25
Since inception8.57
Period
Performance, per period *The percentage of Not Rated bonds as of 31.01.2020 is 0.5%.
1M
1.33%
3M
2.89%
YTD
1.33%
2019
14.8%
2018
-1.84%
2017
10.25%
Since inception
8.57%

Investment objective

The investment objective of the Fund is to generate attractive risk-adjusted return under prudent investment management with the aim of exploiting inefficiencies in fixed income markets worldwide.

The investment objective of the Fund is to generate attractive risk-adjusted return under prudent investment management with the aim of exploiting inefficiencies in fixed income markets worldwide.

Top 5 issuers Rating Weight
Cash/leverage 3.2%

VEON

BB+ 2.9%

REPUBLIC OF SOUTH AFRICA

BB 2.2%

CELTIC RESOURCES

BB 2.1%

AP MOLLER-MAERSK

BBB 1.9%

WEST AFRICAN DEVELOPMENT BANK

BBB 1.4%

Allocation January 2020

14% Russia

11% Asia Pacific

2% CIS

12% Developed Europe

23% Latin America

11% Emerging Europe

19% Middle East / Africa

8% North America

Fund details January 2020

AuM $127’649’786.81
ISIN (B2) KYG0750S1378
Currency USD
Type Fixed Income, open-ended
Coupons Reinvested
Credit risk Low (average Fund’s credit rating BB+ -BBB)
Leverage 0-100%
Management fee 0.75% p.a.
Performance fee 15%, HWM
Launch date November 27, 2015
Incorporation Cayman Islands
Investment manager AXIOMA Wealth Management AG (Switzerland)
Custodian/prime-broker Credit Suisse AG (BBB+) (Switzerland)
Administrator Apex Fund Services (Malta)
Valuation Monthly
Minimum subscription $100’000
Subscription/Redemption Monthly, 5 BD notice
Target return 6-8% p.a.

Commentary

January 2020

This month saw an escalation in the confrontation between the US and Iran in the beginning of the month, which was short-lived and didn’t have a significant impact on the markets. The outbreak of the coronavirus in the second half of the month raised concerns among investors. The damage to the global economy will depend on how long it takes until the virus is contained. The only Chinese issuers we hold in our portfolios are online retail companies, which, along global pharmacy firms, have actually seen an increase in bond prices since the outbreak. However, overall, the bond markets continued the rally which started back in 2019, amid a truce achieved in the US-China trade conflict, with our fund earning 1.3% in the first month of the year. The long-awaited US-China phase-one trade deal was finally signed on 15 January. We expect the deal to drive a pick-up in trade volume and subsequently in industrial production and support a subdued global economic growth in the months to come. The wave of monetary easing around the globe continued this month, with South Africa, Russia and Turkey Central Banks all cutting their benchmark rates. The Fed and ECB, on the other hand left the benchmark rates unchanged. The key take-away from the Fed’ meeting this month is its increased concern about not meeting the inflation target, which means that no rate hikes are to be expected anytime soon. We think that rising political uncertainties, mainly coming from the US elections, will put pressure on the Fed for further easing in the second half of the year. The last day of January marked the official UK’s departure from the European Union. However, the parties are yet to negotiate a trade deal until the end of the year, which is unlikely to be easy, and another source of uncertainty to the markets this year. The primary market saw a revival with the beginning of year and continued showing increased activity throughout the month. With cash available from the recent subscriptions into the fund, we acquired several new issues: Norwegian Aker BP ASA (BBB-/Ba1), Banco Santander Chile (A/A1/A), State of Israel (AA-/A1/A+), Credit Agricole (BBB+/A/Baa1), Indian Power Finance Corporation Limited (BBB-/Baa3), Brazilian Globo (BB/Ba1/BB+) among others. We stick to conservative strategy keeping moderate duration, which is at 4.3 years as of the end of the month, and high level of investment grade bonds. The fund ended the month of January with average yield-to-worse of 3.3% and a cash position of 3.2% which we intend to fully invest seizing opportunities in primary or secondary markets.