Alma Selwood Euro High-Grade
Overview
Alma Platinum IV Selwood Euro High-Grade is a long only European credit investment grade fund.
The fund’s management is delegated to Selwood AM France.
Share Class
NAV
Cumulative Performance (%)
Fund Inception 15 September 2021
| Daily | Monthly | Ytd | 1Yr | 3Yr | 5Yr | Incept. | Incept.Date |
|---|
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Strategy & Manager
Fund Strategy
The Strategy aims to deliver enhanced risk / returns by profiting from dislocations in the pricing of index-related credit instruments (iTraxx Main Europe). The Fund seeks to outperform standard Investment Grade Long Only cash allocations / ETF. The Fund is focused on European investment grade credit instruments, and aims to provide an alternative to traditional cash credit solutions through predominantly deploying senior tranches of CDS index-related instruments. Selwood has also sought to incorporate risk mitigation criteria for the Fund, and seeks to lower capital consumption under Solvency II.
Investment Manager
Selwood Asset Management is a London based fundamental credit investment manager, established in 2015 by Sofiane Gharred, a former partner at Chenavari and proprietary trader at Credit Agricole CIB. Created in 2020, Selwood Asset Management (France) SAS, is led by Guillaume Merle and Mathieu Labelle. The Firm is focused on managing long bias fixed income funds and seeks to develop products which utilise credit indices and derivatives.
Key Persons
Mathieu Labelle
CIO and Conducting Officer of Selwood Asset Management (France) SAS
Mathieu is a fixed income trader with 20 years’ industry experience. He has expertise across instruments, having been a market maker on structured credit and derivatives, government bonds and covered bonds.
Prior to joining Selwood, Mathieu was a senior trader at Credit Agricole CIB in London, where he spent over 15 years. At Credit Agricole CIB, Mathieu developed extensive knowledge in rates and credit trading, in both flows and structured trading. He gained expertise in identifying business opportunities, following and analysing market behaviour, and leveraging a deep understanding of financial industry to drive account and trading success.
Mathieu holds a bachelor of Physics from University of Rouen Normandie, an ITM diploma (Master) from CFPB. He was authorised by the UK’s FCA as approved person between 2005 and 2016 (MAL01151).
Thibault Brohard
Co-CIO of Selwood Asset Management (France) SAS
Thibault is a fixed income trader with 15 years’ of industry experience. He has a strong expertise in structured credit investments having been a Structured Credit Trader most of his career. Prior to joining Selwood, Thibault was a senior PM at Orchard Asset Management in London where he spent almost 6 years managing at peak a fund of circa EUR 1bn. Before that he spent 2Y at Christofferson & Rob as Director / PM to help build their structured credit derivatives fund dealing with Rec Cap transactions and acquiring portfolios of derivatives from core and non-core Bank divisions. He also worked several years in the banking industry at UBS as an Executive Director and Calyon – always as a Structured Credit Trader.
Thibault holds a Master of Science from London School of Economics and a degree from Ecole Polytechnique in France (Grande Ecole for Research and Engineering, specialisation in Economics and Applied Mathematics).
Statistics & Commentary
Performance
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Investment Manager's Commentary
as of 31/05/2024Market Review and Outlook
This month, as with every month-end in 2024, the final ECB key rate projection for December 2024 has been revised. The current prediction is a -0.55% cut for the rest of the year, up from -1.6% at the end of 2023. This change is due to a better-than-expected European economy and more persistent inflation globally. The German 5Y is up 9bps, with 2Y-5Y steeper 2bps and 5Y-10Y curve unchanged. On the other side of the Atlantic, the 5Y US Treasury yield dropped by 20bps as the US economy showed signs of slowing (weaker sentiment and spending). This move favoured the EUR/USD (up 1.6%), ending its downward trend since the end of 2023. The €Stock50 benefitted from this environment, gaining +1.27% in May, with technology stocks outperforming. The Nasdaq100 showed a gain of +6.25% compared to the S&P 500’s +4.80%.
On the credit side, iTraxx Europe 5Y tighten 3.25bps and € Corp Cash Index gained +0.22% this month. Financial issuers outperformed corporate, as high yield outperformed investment grade. It is very interesting to observe the absorption capacity of new issuances, with a high cover ratio and a very limited discount to secondary markets. Appetite for credit and rates remains at its highest level. We expect to see the first rate cut in Europe on the 6 June with the ECB anticipated to lower its key rate by 0.25%, a move with a 95% implied market probability. Rates and inflation will continue to drive market sentiment, but we expect spreads to remain between 50-55bps. Only geopolitical events could serve as a significant catalyst for further widening.
Fund
The fund outperformed its benchmark, finishing up +0.42% in May compared to the benchmark +0.22%. Our duration is 0.10 below the benchmark at the end of the month, as a hawkish surprise in Europe is likely. Our exposure is just below 5x on Super Senior iTraxx, as we prefer to maintain a conservative approach. Our carry and roll down is around ~5.40% (gross); above its benchmark at approximately 4.50%. We anticipate recouping our YTD underperformance of synthetic against cash through higher carry and roll down, without increasing risk at this spread level.
Facts & Documents
Facts
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 15 September 2021
Base Currency: EUR
Depositary, Administrator, Transfert Agent: CACEIS Investor Services Bank S.A.
Dealing: Daily with a 2-days notice
Cut-off time: 3 pm CET
Management Company: Alma Capital Investment Management
Investment Manager: Selwood Asset Management (France) SAS
Countries where the fund is registered:
Luxembourg, Austria, Germany, France, UK, Italy, Finland, Ireland
Sustainability-related disclosures:
The information related to the integration of sustainability risks and to the potential adverse sustainability impacts at the sub-fund level can be found in the prospectus of the Fund.
Identifiers:
I1C-E
ISIN: LU2139806298
Ticker: ALSEHIE LX Equity
Launch: 15 Sep 2021
I2C-E
ISIN: LU2139806538
Ticker: ALSEHIC LX
Launch: 6 Oct 2021
I2D-E
ISIN: LU2277570862
Ticker: ALSEHDE LX Equity
Launch: 15 Sep 2021