Fund

AXIOMA Leveraged Bond Fund

AXIOMA Leveraged Bond Fund

Performance

December 2021
  • Growth of $1000 invested in B1
  • Monthly net return in %, B1

Period

Performance, per period

Historical volatility p.a.6.90
1M0.49
3M-1.07
YTD-0.43
202013.65
201912.23
2018-2.36
Since inception p.a.7.23
Period
Performance, per period
1M
0.49%
3M
-1.07%
YTD
-0.43%
2020
13.65%
2019
12.23%
2018
-2.36%
Since inception p.a.
7.23%

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 -34.6%

Polyus

BB+ 2.5%

Gazprom

BBB- 2.3%

Lukoil

BBB+ 2.1%

Hyundai Capital America

BBB+ 1.9%

Int. Container Terminal Services

NR 1.7%

Allocation December 2021

25% Latin America

12% Middle East / Africa

18% North America

7% Developed Europe

18% Russia

5% Emerging Europe

14% Asia Pacific

1% CIS

Fund details December 2021

AuM 217’478’286.53
ISIN (B1 / B2) KYG0750S1295 / KYG0750S1378
Currency USD
Type Fixed Income, open-ended
Coupons Reinvested
Credit risk Medium (average Fund’s credit rating BBB-/BB+)
Leverage 0-100%
Management fee (B1 / B2) 0.5% p.a. / 0.75% p.a.
Performance fee 15%, HWM
Launch date (B1 / B2) November 27, 2015 / July 01, 2016
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 2021

In the month of December, volatility on the markets was driven mainly by the new “Omicron” variant, which has added to the already-existing concerns about economic growth, as new mobility restrictions were instated in many parts of the world. However, credit spreads have recovered from the November widening as the initial reaction to the new virus was seemingly overdone. Our fund has seen a positive return of 0.5%* in December, which has translated in -0.4% year-to-date net return*. At its last policy meeting of 2021, Fed announced the doubling of its tapering pace from USD 15 billion to USD 30 billion per month, which has not been a surprise. The real attention was on the dot plot, which showed a significant shift from the last one. Thus, FOMC members now expect 3 rates in 2022, followed by 3 rates in 2023, compared to 1 and 3 respectively as of September meeting. The new dot plot has only aligned Fed’s rate expectations up to 2024 to those of the market. Among EM countries, Turkey and Chile were in the spotlight in December. In Chile, presidential elections resulted in the victory of a leftist candidate, hence the concerns of the investors. However, the new president will not find it easy to push his own agenda, as the parliament is fragmented, and it will take time for fiscal situation to deteriorate should disrupting policies be adopted. As about Turkey, Central Bank has cut the policy interest rate again and Turkish lira has continued its depreciation. However, it recovered partly by the end of the month, after President Erdogan has announced extraordinary measures to support the currency. The outcome has been a good bounce in Turkish bonds and other assets. Despite challenges for the country amid a monetary policy error, we continue to have a positive view on Turkish corporates we currently own, as well as on the long-term outlook of the Turkish economy. Selectivity in securities’ selection is key. This month, we received an allocation in a new 10-year issue by American technology company Western Digital (BB+/BBB-/Baa3). In the second half of the month, the market activity has overall slowed down, as it normally does during winter holidays. Hence, we used that period of time to review our portfolios and outline our investment strategy for 2022. Our fund has closed the month of December with average duration of 5.6 years, average yield-to-worse of 3.7% and leverage of 34.6%.Our fund has closed the month of November with average duration of 5.3 years, average yield-to-worse of 3.5% and leverage of 24.4%.