Fund

AXIOMA Leveraged Bond Fund

AXIOMA Leveraged Bond Fund

Performance

June 2022
  • Growth of $1000 invested in B1
  • Monthly net return in %, B1

Period

Performance, per period

Historical volatility p.a.9.78
1M-5.49
3M-10.75
YTD-31.27
2021-0.40
202013.60
201912.20
Since inception p.a.0.76
Period
Performance, per period
1M
-5.49%
3M
-10.75%
YTD
-31.27%
2021
-0.4%
2020
13.6%
2019
12.2%
Since inception p.a.
0.76%

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 -65.4%

Hyundai Capital America

BBB+ 2.0%

Western Alliance Bank

BBB 1.9%

ICTSI Treasury BV

NR 1.8%

Scotiabank Peru SAA

BBB 1.7%

Mizuho Financial Group Inc

A- 1.7%

Allocation June 2022

28% Latin America

9% Russia

19% Asia Pacific

8% Developed Europe

18% North America

5% Emerging Europe

12% Middle East / Africa

2% CIS

Fund details June 2022

AuM 139'136'168
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

June 2022

Worries on inflation and, later, recession have been keeping markets on their toes throughout the month of June. While common anticipation was a 50 basis-point rate hike, the Fed decided to impose a 75 b.p. lift-off, mid-month. Such move, along with the incoming macroeconomic data made recession concerns grow. Amid the greater-than-expected monetary tightening and the concerns, as well as overall US Treasury yields growth, our Fund demonstrated a performance of -5.5% in June. The beginning of the month was marked by worries regarding energy costs (after a ban on Russian oil and Europe) and food prices, while the US manufacturing PMI reading (ISM) for May indicated growth in the sector. The US CPI readings for May came higher than anticipated. The households’ inflation expectations for the same period were notably elevated, and thus were followed by the Fed’s 75 b.p. rate hike. Consumers in June have assessed current economic conditions significantly lower than they did in May, according to the US Michigan Consumer Sentiment index. And the US consumers' confidence (Conference Board) extended its fall in June as the respective index level reached 98.7, which was lower than the anticipation of markets at 100. Although consumers assess current conditions as relatively modest, the short-term outlook of economic conditions is assessed as gloomy. Their negative outlook led to recession worries resurfacing. Also, the Fed officials were making subtle comments and indicating that demand in interest-rate sensitive sectors began to cool down. The US ISM Manufacturing PMI for June came lower than expected. The Fed’s Chairman Powell, however, implied that the recession probability is not high, though the engineering of soft-landing of the economy appeared challenging. Whether comments of Jerome Powell and his colleagues are convincing enough is also questionable. The monetary authority also made it explicit that fighting inflation is of a higher importance now. Thus, markets are watching the central banks’ moves, as well as geopolitical developments closely. We, on top of these, are focused on optimizing our investment strategy and carefully selecting primary and secondary issues, while maintaining the ’wait-and-see’ mode. Our fund closed the month of June with an average duration of 5.5 years, an average yield-to-worst of 10.0%, and leverage at 65.4%.