Fund

AXIOMA Leveraged Bond Fund

AXIOMA Leveraged Bond Fund

Performance

December 2020
  • Growth of $100 investment
  • Monthly return

Period

Performance, per period *The percentage of Not Rated bonds as of 31.12.2020 is 0.2%.

Historical volatility p.a.7.60
1M1.26
3M3.84
YTD16.75
201914.80
2018-1.84
201710.25
Since inception p.a.10.00
Period
Performance, per period *The percentage of Not Rated bonds as of 31.12.2020 is 0.2%.
1M
1.26%
3M
3.84%
YTD
16.75%
2019
14.8%
2018
-1.84%
2017
10.25%
Since inception p.a.
10%

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 -0.5%

Hyundai Capital America

BBB+ 2.8%

BP Capital Markets

A- 2.5%

VEON Holdings

BB+ 2.4%

Sibur Securities

BBB 2.2%

Western Alliance Bank

BBB- 2.2%

Allocation December 2020

27% North America

10% Asia Pacific

19% Latin America

10% Developed Europe

13% Middle East / Africa

7% Emerging Europe

12% Russia

1% CIS

Fund details December 2020

AuM 207'102'555.80
ISIN (B2) KYG0750S1378
Currency USD
Type Fixed Income, open-ended
Coupons Reinvested
Credit risk Low (average Fund’s credit rating BBB-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 4-6% p.a.

Commentary

December 2020

The bond markets have continued their rally amid an increased search for yield in an ultra-low interest rate environment. Our fund has added 1.3% in the last month of the year. Thus, our leveraged bond strategy wrapped up 2020 with 16.8% performance before fees. The mood has been sustained by the commencement of the vaccination campaign, which has fueled hopes that the pandemic can soon be overcome. The vaccine optimism has outpaced the worries related to the rise in infections and reinstated lockdown measures. Inflows momentum in Emerging Markets hard-currency bond funds has continued, driving Bloomberg Barclays EM USD Index spread tighter by further 22 basis points in December. Politicians in the US and Europe have also provided support to the markets. The US Congress has finally agreed on a new fiscal package, which was subsequently signed by President in Office Trump. Over the Atlantic, Brexit deal has been finally agreed right before Christmas, thus clearing some of the years-long uncertainty. At its December policy meeting, the US Fed has expressed its commitment to continue purchasing bonds ‘until substantial further progress has been made’ in achieving employment and inflation goals. The dot plot revealed that a majority of Fed officials do not expect any rate hikes through to 2023. In the first half of December we have made some further investments on the primary market, namely, in new bonds issued by the Hong Kong Airport Authority (AA), global internet company Prosus (BBB-/Baa3), the city of Istanbul (BB-), the Government of Morocco (BBB-/BB+), the Spanish electric company Enfragen Energia Sur (BBB-). We have eliminated our position in the Indian chemical company UPL (BBB-/Baa3), as we consider its bonds overpriced for risks entailed. We head into the new year fully invested, as we expect the economy to continue to recover and the Federal reserve policy to remain accommodating. At the same time, due to near-term risks related to the rise in Covid-19 infections, we maintain a defensive stance, favouring credit quality to high yield and short to long duration. We continue to favour primary markets for investments. The fund average yield-to-worst stood at 2.3% at the end of December, while the average duration - at 4.6 years. Leverage has come down to 0.5%.