Global credit funds & CLO's
June 2020
| Issue 224Published in London & New York.
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June 2020 | Issue 224
Data
funds
Fund performance
CLO tranches move up
Leading fund
Frankfurt-based Lupus Alpha took the top performing spot in April returning 12.05%, following one of the hardest months for fund performance in history.
“We took advantage of selling off triple B notes prior to the crisis which helped alleviate stress in March,” says Michael Hombach, portfolio manager at Lupus Alpha. “After starting to pick up single A tranches in late March we did not participate in triple B credits again, due to the uncertainty surrounding them. We also highlighted certain ‘stress sectors’ of CLO managers prior to ratings agencies and avoided these notes.”
The fund invests mainly in European CLO tranches with a high rating, offering investors lower volatility and fewer drawdowns due to the high credit rating.
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Top performers in April 2020 (%)
Lupus Alpha CLO High Grade Invest
Lupus Alpha CLO High Grade Invest Fund vs Ucits cumulative returns (%)
*Data since fund inception (October-17)
Creditflux Index Returns April (%)
Leading the way were CLO funds, especially those that are Ucits-compliant, as seven of the top 10 fit this description. Strong performance was concentrated among only a few managers as Lupus Alpha, Alegra and CIFC held those seven positions. High returns were seen across the CLO capital stack as Alegra ABS I, a fund that buys CLO equity and junior debt was up 11.03%, while Alegra High Grade ABS Fund, which primarily invests in single As and triple Bs, made 9.90%.
The Marathon Global Emerging Markets Fund stood out this month, as it returned 10.96% in April, managing to more than atone for the 9.75% loss in March. Prytania’s Athena Fund and the Cheyne Total Return Credit Fund December 2024 represented the structured finance and corporate long-short funds this month, making 10.46% and 8.97% respectively.
April returns managed a partial bounce back after a tumultuous March. 82% of funds listed in the Creditflux database made positive returns, showing at least small signs of recovery after 90% of all funds listed posted negative returns in March.
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