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Data Funds
Fund performance
CLO funds dominate top performers in August
CLO funds backed up their strong performance in July with a repeat in August, claiming the top six fund performer slots in our top 10. Indeed, the top three were identical to those in July. CIFC’s CLO Opportunity Fund VI once more proved the standout performer, while one of that manager’s more established funds, CIFC CLO Enhanced Income Fund, repeated its strong second-placed performance from last month, adding 2.20%, and Wollemi Investments I again rounded out the top three, gaining 2.18%.
Overall, it was a generally positive month, with all categories bar corporate distressed improving on July. Nonetheless, that category continues to lead the way in year-to-date average returns, ahead of credit multi-strategy and US high yield.
For the past 12 months, meanwhile, Hildene’s Opportunities Fund posted the best result, adding 19.83%, ahead of Pictet Alt’s Distressed & Special Situations and Pleiad Credit Opportunities funds.
N.B. The performance charts do not include CIFC CLO Opportunity Fund VI due to its recent launch and consequent lack of a trailing-12-month record.
Creditflux index returns August (%)
Leading fund
CIFC CLO Opportunity Fund
It proved a particularly strong month for CIFC, with four of its funds numbering among the top six-ranked performers in Creditflux’s funds index.
Top of the pile was the manager’s newest fund, CIFC CLO Opportunity Fund VI, which launched in May this year with a target return of 12-15%. The fund added an estimated 2.81% in August, taking its total gain over the last four months to just over 10%.
Jay Huang, head of structured products investments at CIFC AM, told Creditflux their approach was driven by strategic allocation to distressed CLO debt.
“In most cases, the deals are failing their junior-most overcollateralisation tests, so excess spread is diverted to pay down senior notes, delivering the structure and building credit enhancement beneath our tranche,” he said.
“Because they are frequently orphaned by ratings-sensitive institutional sellers, we found these notes trade at discounts to their underlying loan net asset value and at attractive yields relative to alternatives, including CLO equity.”
Top credit funds in August (%)
CIFC CLO Enhanced Income Fund vs CLO fund cumulative returns (%)
*Estimate
See hedge fund listing notes
