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Data Funds
Fund performance
CLO funds dominate again as they take 18 spots in top 30 list
Continuing their run of form, CLO funds again took top spot in our index ranking in April. The category had 18 funds in the top 30 in our credit hedge fund ranking for the month. CLO funds also continue to lead in the year-to-date ranking, reaching a 6.92% return in April, an increase from 5.62% in March.
After a strong April, Lupus Alpha leads the 2024 performance ranking with CLO Opportunity Notes I. CLO funds from managers Alegra and Orchard are second and third (see table below).
Despite the positive performance in the CLO market, some other funds in the Creditflux rankings have dipped. 78% of funds made a positive return in April, down from 95% in March and 90% in February — leading some to question whether we are starting to see an end to the positive start to the year, or whether we are just witnessing a blip in the bullish environment.
Creditflux index returns April (%)
Leading fund
Lupus Alpha CLO Opportunity Notes I
Frankfurt-based Lupus Alpha Asset Management claimed top spot on the April credit fund tables, as Opportunity Notes I returned 3.71%. This follows the firm’s win at the Creditflux Manager Awards for CLO Opportunity Notes II, which won the Best CLO Fund (<$150m) award.
Michael Hombach, portfolio manager, said: “The fund was defensively positioned in April, with three special situations arising to help the performance. Firstly, there was an already called deal that paid a residual amount that hadn’t been marked. Secondly, the mid-April payment date helped the positive performance for many deals. Finally, a call notice of short double-B paper called to par.”
Hombach believes that in the current environment pure equity should over-perform, if idiosyncratic issues can be avoided. Meanwhile, single Bs are paying around 13% and providing headroom for uncertainty caused by geopolitical issues. He also adds that “technicals seem strong and supportive — with WAS tightening... on the horizon”.
Top credit funds in April (%)
Lupus Alpha CLO Opp Notes I vs CLOs cumulative returns (%)
*Data since fund inception (Sep-2012)
**Estimates
See hedge fund listing notes
