Active credit manager Coolabah Capital Investments has launched its inaugural product on Chi-X Australia, the Coolabah Active Composite Bond Fund, aimed at finding and exploiting bond mispricings in high grade credit markets.
The Coolabah Active Composite Bond Fund (Hedge Fund) (“FIXD”) is a quoted managed fund that offers retail investors access to a market-leading, daily liquidity, long duration active composite bond strategy that was previously available only to superannuation funds.
A statement from Coolabah said the Coolabah Active Composite Bond Fund employs an active fixed-income strategy focused on mispricing in government and corporate bond markets and invests in a diversified portfolio of defensive assets of investment-grade quality, including cash, government bonds, senior and subordinated bonds, and asset-backed securities.
By finding and exploiting bond mispricings in high grade credit markets, Coolabah provides investors with additional value by generating capital gains in addition to the yield on those securities.
Coolabah Active Composite Bond Fund aims to deliver superior risk-adjusted returns after management costs over its benchmark, the Bloomberg AusBond Composite 0+Yr Index.
As at May 2021, Coolabah managed $6.5 billion in FUM with 27 execs, including 14 analysts, 5 portfolio managers and 4 PhDs.
Chi-X Australia is a regulated stock exchange committed to transforming, improving and growing Australia’s securities and derivatives markets.
Coolabah Capital Investments’ Portfolio Management Director and Market Technicals Analyst, Ying Yi Ann Cheng said the company was pleased to be able to grow its relationship with Chi-X by partnering to bring FIXD to market.
“This was previously an institutional strategy for super funds that was not available to the public,” she said.
“Since the Coolabah Active Composite Bond Fund’s (Hedge Fund) inception in March 2017, it has returned 5.35% per annum after retail fees. That’s 1.37% above the Composite Bond Index’s 3.98% per annum return. It ranks in the top 2 strategies in Mercer’s Australian fixed-income (active) universe over the last 3 years to 30 April 2021.”*
“Clients are seeking the downside protection that fixed income offers in this time of market volatility, without needing to sacrifice consistent quarterly income or capital gains.”
“Our global team of more than 26 analysts, portfolio managers and executives typically trade around $150 million a day to exploit bond mispricings we discover with our proprietary quantitative models, allowing us to deliver positive outcomes for investors.”
Chief Executive Officer of Chi-X Australia, Vic Jokovic, said the fund was the latest in a suite of premium investment options to be made available on Chi-X.
“We are pleased to partner with Coolabah Capital Investments to bring their first fund on Chi-X to market,” he said.
“FIXD will help to broaden the range of options for investors seeking a more defensive allocation for their portfolio, which is critically important as global markets continue to prove volatile.”
Coolabah Active Composite Bond Fund is issued by Equity Trustees, the responsible entity selected by Coolabah.
*Past performance is not necessarily indicative of future outcomes.