Volta Finance 18.6% YTD return stands out for multi-asset income funds (LON:VTA)

Volta Finance Ltd (LON:VTA) monthly report for September 2023, published by AXA IM.

PERFORMANCE and PORTFOLIO ACTIVITY

Including the dividend to be paid in October (record date in September), Volta Finance posted another positive monthly performance in September 2023 (+1.6%) and has now delivered a YTD performance of 18.6%.

Volta’s underlying sub asset classes monthly performances** performed as follows: +0.7% for Bank Balance Sheet transactions, +3.7% for CLO Equity tranches, -1.4% for CLO Debt tranches and -0.1% for Cash Corporate Credit and ABS. This month, being long USD against Euro provided circa +0.5% of performance.

September recorded another strong month for leveraged loans with US and European markets moving up again (ELLI was up 1.1% while US LLI was up c.1.0% according to Pitchbook LCD) even though some market softness started to show at the end of the month alongside other credit markets. This impacted some of our US CLO debt exposures that were marked lower at the end of the month.

In terms of cashflows, Volta received €0.8m of distributions through the month, and a cumulative total of €25.8m in cashflow generation over the last 6 months. In addition, Volta received some principal repayments from one Bank Balance Sheet transaction for €1.5m reducing further the Bank Balance Sheet exposure to 1.8%.

Regarding the European warehouse exposure, we can report that the CLO priced in September and is expected to close in November. The warehouse IRR is expected to be above 20% and Volta is rolling its current exposure into the CLO Equity and the CLO single B tranche. Overall, we expect over 15% IRR from the blended investment.

Through the month, we also partially sold 2 US CLO debts and opened another US warehouse to be able to benefit from market volatility.

As of end of September 2023, Volta’s NAV was €238.3m, i.e. €6.51 per share.

*It should be noted that approximately 1.48% of Volta’s GAV comprises investments for which the relevant NAVs as at the month-end date are normally available only after Volta’s NAV has already been published. Volta’s policy is to publish its NAV on as timely a basis as possible to provide shareholders with Volta’s appropriately up-to-date NAV information. Consequently, such investments are valued using the most recently available NAV for each fund or quoted price for such subordinated notes. The most recently available fund NAV or quoted price was 1.08% as at 31 July 2023, 0.40% as at 30 June 2023.

** “performances” of asset classes are calculated as the Dietz-performance of the assets in each bucket, taking into account the Mark-to-Market of the assets at period ends, payments received from the assets over the period, and ignoring changes in cross-currency rates. Nevertheless, some residual currency effects could impact the aggregate value of the portfolio when aggregating each bucket.

Volta Finance Ltd (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
Twitter
LinkedIn
Volta Finance

More articles like this

Volta Finance

CLOs: One of the most underutilized asset classes

In the aftermath of the Global Financial Crisis (GFC), Collateralized Loan Obligations (CLOs) emerged as a contentious topic and were viewed through a cautious lens. However, as financial markets have evolved, the asset class has been

Volta Finance

Why CLOs are outperforming core bonds in today’s market

CLOs provide the attributes that investors look for in their core bond portfolios: attractive yield, safety, and diversification, and have continued to outperform core fixed income through this most recent volatility. As a result, an allocation

Volta Finance

Understanding CLOs and How They Work

Collateralized Loan Obligations (CLOs) are a new asset class within the finance world. They offer diversification options and potential attractive returns to investors. However, their complex structure and involvement of multiple parties can make them difficult

Volta Finance

Stability and Performance of European CLOs

European collateralized loan obligations (CLOs) have proved remarkably stable since S&P Global Ratings rated its first transaction in 2000. During this time, European CLOs have resisted several upheavals, including the global financial crisis, the dotcom bubble,

Volta Finance

The rise of CLOs in the global financial system

The integrity of the global financial system has been endangered by a number of external shocks to the economy over the past 20 years, underscoring the necessity for proper portfolio diversification to safeguard investors from negative market

Volta Finance

The Importance of CLOs in Risk Management and Diversification

In an ever-changing landscape of modern financial services, collateralized loan obligations (CLOs) and structured asset-backed security have become crucial in shaping investment strategy, risk management and capital allocation. CLOs – structured security backed by assets –

Volta Finance

A guide to high-yield fixed income alternatives

When investors think of bonds, their minds immediately go toward U.S. Treasuries or other IOUs issued by corporations. Maybe municipal securities enter their minds. But these are just the tip of the iceberg with regard to

Volta Finance

Record CLO sales boost Wall Street buyout financing

Wall Street bankers looking to raise fresh financing for multi-billion dollar buyouts are getting a boost from the record start to the year from a critical part of the leveraged loan universe. Sales of collateralized loan

Volta Finance

Diversified investment opportunities

For the intrepid investor, there is no shortage of diversified investment opportunities. Interest in cryptocurrencies, structured products, direct indexing, and other “trendy” assets has grown in recent years, but a new report by Morningstar suggests that advisors may need