UK multi asset income fund returns over 9.5% YTD with strong outlook

AXA IM has published the Volta Finance Ltd (LON:VTA) monthly report for May 2024.

PERFORMANCE and PORTFOLIO ACTIVITY

Dear investors,

May was a strong month for Volta Finance, with a net performance of 1.7% and year-to-date return close to +9.5%. In comparison, US High Yield returned +1.63% year-to-date while European High Yield returned +2.57%.

Despite volatile markets, credit markets performed well in May. The momentum was fueled – in Europe – by anticipation of imminent rate cuts from the European Central Bank, which were eventually implemented early June. Both High Yield Credit indices CDX (for the US) and Xover (for Europe) tightened by 20bps+ on the month while US 10-year treasuries decreased from 4.68% to 4.50%. Leveraged Loan markets also showed strength as Euro Loans gained one point to 98.15px while the US index closed 30 cents up at 96.94px.

Primary CLO markets remained extremely active, with significant issuance in both markets: there was circa USD 47bn of supply in the US (BSL + MML) and EUR 8.5bn in Europe. Spreads tightened across the capital structure with AAAs moving 5bps tighter to +140bps ; Non-Investment Grade assets also gained momentum as Tier One CLO managers managed to place their BB-rated tranches well inside +600bps in the US.

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