Fund

AXIOMA’s Fixed Income Fund means the maximum total return still consistent with preservation of capital and prudent investment management.

AXIOMA’s Fixed Income Fund means the maximum total return still consistent with preservation of capital and prudent investment management.

Performance

November 2017
  • Growth of $100 investment, rhs
  • Quarterly return, 1hs

Period

Performance*, per period * The percentage of Not Rated bonds as of 30.11.2017 is 0.7%

Historical volatility5.1% p.a.
3M2.8%
YTD9.8%
201613.9%
2015**** Gross average performance of USD accounts is being used up to 30.11.2015. The underlying strategy was launched on 01.01.2009. As of 30.11.2017 historical performance of the strategy is 14.5% p.a. with volatility at 11.5% p.a.10.4%
Since inception11.2% p.a.
Period
Performance*, per period * The percentage of Not Rated bonds as of 30.11.2017 is 0.7%
3M
2.8%
YTD
9.8%
2016
13.9%
2015**** Gross average performance of USD accounts is being used up to 30.11.2015. The underlying strategy was launched on 01.01.2009. As of 30.11.2017 historical performance of the strategy is 14.5% p.a. with volatility at 11.5% p.a.
10.4%
Since inception
11.2% p.a.

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 holdings Rating Weight
Cash/leverage 0.0%

VimpelCom 5.95%

02/13/23

BB 2.3%

Lukoil 4.563%

04/24/23

BBB- 1.9%

Mobile Telesystems OJSC 5%

05/30/23

BB+ 1.9%

Novolipetsk Steel 4%

09/21/24

BBB- 1.4%

El Puerto de Liverpool 3.875%

10/06/26

BBB+ 1.4%

Allocation November 2017

15% Russia

11% Asia Pacific

2% CIS

10% North America

33% Latin America

8% Developed Europe

13% Middle East / Africa

7% Emerging Europe

Fund details November 2017

AuM $75’642’192.64
ISIN (B2) KYG0750S1378
Currency USD
Type Fixed Income,
open-ended
Coupons Reinvested
Credit risk Low
(average 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

November 2017

Bond investors enjoyed a fairly calm month in November with US Treasury yields slightly rising and credit spreads remaining virtually flat. Coupon income enabled the Fund to close the month in a positive territory. The US Treasury yield curve has been flattening year-to-date. The short and medium-term yields have been picking up following the interest rate hikes, while the longer-term yields (bonds with maturities of 20–30 years) have been going down due to low inflation expectations and QE programmes put in place by the world’s leading central banks. While the Fed stopped its bond purchases as early as in November 2014, the ECB and the Bank of Japan continue buying assets for ca. USD 150 bn per month. Inflation in the USA remains the key concern for investors. So far, the official inflation data have been in line with the market expectations and below the Fed target (at the end of October, the PCE deflator stood at 1.45% vs the target of 2%). While price performance shows some signs of stronger inflationary pressure, the average wage growth rates remain low despite unemployment hitting a new low. Brent traded within the range of USD 60–65 per barrel, hitting the year's new high of USD 64.5 and creating a favourable environment for the bonds of oil companies and EM bonds at large. However, this failed to translate into further narrowing of credit spreads, as they are already close to their record lows. Oil market analysts remain cautious with price assumptions for the next year’s forecasts averaging USD 50 per barrel. Discussions on raising the US public debt ceiling are scheduled to take place in December, which is likely to intensify market jitters. Furthermore, the markets of South Africa, the Middle East and Turkey are under increasing pressure due to their domestic tensions.

Bond investors enjoyed a fairly calm month in November with US Treasury yields slightly rising and credit spreads remaining virtually flat. Coupon income enabled the Fund to close the month in a positive territory. The US Treasury yield curve has been flattening year-to-date. The short and medium-term yields have been picking up following the interest rate hikes, while the longer-term yields (bonds with maturities of 20–30 years) have been going down due to low inflation expectations and QE programmes put in place by the world’s leading central banks. While the Fed stopped its bond purchases as early as in November 2014, the ECB and the Bank of Japan continue buying assets for ca. USD 150 bn per month. Inflation in the USA remains the key concern for investors. So far, the official inflation data have been in line with the market expectations and below the Fed target (at the end of October, the PCE deflator stood at 1.45% vs the target of 2%). While price performance shows some signs of stronger inflationary pressure, the average wage growth rates remain low despite unemployment hitting a new low. Brent traded within the range of USD 60–65 per barrel, hitting the year's new high of USD 64.5 and creating a favourable environment for the bonds of oil companies and EM bonds at large. However, this failed to translate into further narrowing of credit spreads, as they are already close to their record lows. Oil market analysts remain cautious with price assumptions for the next year’s forecasts averaging USD 50 per barrel. Discussions on raising the US public debt ceiling are scheduled to take place in December, which is likely to intensify market jitters. Furthermore, the markets of South Africa, the Middle East and Turkey are under increasing pressure due to their domestic tensions.