Fund performance

Light at the end of the tunnel for credit funds after difficult year

Following a tough September, credit funds bounced back in October as 59% of funds made positive returns. The US high yield index led the way with 1.54% as two-thirds of the category managed returns above 1%, including the top performing Wasserstein fund at 14.70%.

Creditflux index returns October (%)

The 2022 landscape is reflected in the top 10, as only two funds have positive YTD returns. Hellebore Credit Multi-Strategy sits top for the year at 14.28% and is followed closely by Areca Value Discovery Fund at 14.09%. However these funds are standouts as 80% of the Creditflux fund database has a negative YTD return in 2022, and very little time to turn it around.

But credit multi-strategy funds from Blueglen and Hellebore each posted above 4% in October. Notable returns for Capital Four and Cheyne stood out as the two made 9% and 8.52% respectively.

Leading fund

Wasserstein Debt Opportunities Fund

New York-based Wasserstein took first place in October as Wasserstein Debt Opportunities Fund hit 14.70%, recovering from September’s -14.33% and helping to push their YTD figure to 8.56%.

Rajay Bagaria, CIO at Wasserstein said: “We believe the best opportunities in today’s market are when you can take liquidity risk, which is very different than fundamental risk. Debt issues with lower liquidity can experience unfavorable mark pressure but low prices rarely reflect deep markets.”

“In October, we saw more constructive buying in a few of our core positions which caused levels to improve from unnatural lows. We believe our portfolio is significantly undervalued and has gap-up potential as capital transitions from fatigued holders to more constructive strong hands.”

Top credit funds in October (%)

Wasserstein Debt Opportunities Fund vs US high yield cumulative returns (%)

*Data since fund inception (May-13)

See hedge fund listing notes

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Data

Credit hedge funds