Worried about higher-for-longer rates and/or a recession?

Worried about rates remaining higher-for-longer and/or the rapidly rising risk of a recession? With over $10bn in FUM and Australia’s largest high-grade fixed-income team, including 11 traders and portfolio managers and 18 analysts, Coolabah has solutions for you. Spread across London, Sydney, Melbourne and Auckland, Coolabah’s team runs capital for institutional, wholesale and retail investors across a full suite of daily liquidity, high-grade bond strategies.

Coolabah’s Long Short Credit Fund is an average A+ rated floating-rate or “zero interest rate duration” product that benefits from higher yields if the RBA keeps rates high or lifts them again. Over the last 12 months, the daily liquidity Long Short Credit Fund returned 13.7% after fees.

Coolabah’s daily liquidity Active Composite Bond Fund (Hedge Fund), which is also an ETF (FIXD), is an average A+ rated fixed-rate bond or “long duration” portfolio that benefits if long-term bond yields eventually decline, such as during a recession. Over the last year, FIXD beat the benchmark Composite Bond Index by 4.9% after fees, returning 6.4% net and is one of Australia’s leading “long duration” funds over 1, 3, 5 yr and inception periods.

Worried about higher-for-longer?

Coolabah's Long-Short Credit Fund (LSCF) is a daily liquidity, floating-rate or zero duration, active global bond strategy that seeks to find mispriced securities paying too much or too little yield using scores of quantitative bond pricing models harnessed by Coolabah’s 46 person team. 

LSCF focusses on very low credit risk assets that have very high liquidity, and which can be actively traded.

Over the last 12 months to 31 March 2024, LSCF has returned 13.7% net of fees compared to the RBA cash rate's 4.1%, providing net excess returns of 9.6%. Since its inception in August 2017, LSCF has returned 4.4% p.a. net of fees compared to the RBA cash rate's 1.4% p.a., providing net excess returns of 3.0% p.a.

LSCF is currently yielding 6.3%* p.a. net of management fees with geared exposure to investment grade government, bank and corporate bonds with a current* average credit rating of A+. This is a floating-rate strategy that benefits from interest rates rising, such as when central banks are seeking to fight inflation. Floating-rate notes have variable yields that generally increase or decrease as the RBA cash rate rises or falls.

LSCF offers daily redemption rights. It does not invest in illiquid private debt or equities. It holds “Recommended” ratings by research houses Lonsec and Zenith.

Worried about a recession?

For those worried about a recession and/or long-term government bond yields declining once inflation is eventually brought under control, the Coolabah Active Composite Bond Fund (Hedge Fund) is a fixed-rate bond or “long duration” strategy that benefits from declining government bond yields that normally emerge in anticipation of a recessionary climate. Eventually central banks will hit their peak cash rates, and bond markets will start pricing in rate cuts, as they have done at various times in the last 1-2 years.

The Coolabah Active Composite Bond Fund (Hedge Fund), which is available for exchange trading under the ticker FIXD, has over the last 12 months returned 6.4% net of fees compared to the benchmark Bloomberg AusBond Composite 0+ Yr Index’s 1.5%, providing net excess returns of 4.9%. It also beat peers over this period.

FIXD has generated these excess returns by, amongst other things, identifying mispricings in global bond markets whereby bonds are paying too little or too much interest relative to Coolabah’s proprietary bond pricing estimates.

FIXD targets returns in excess of 1% to 2% annually above the Bloomberg AusBond Composite 0+ Yr Index, after management costs, over rolling 12 month periods and provides exposure to a portfolio of cash securities and investment grade government, bank and corporate bonds with an average target credit rating of A to AA. It cannot invest in hybrids, equities, property, unrated securities, high yield bonds, sub-prime loans or private credit.

Since its inception in March 2017, FIXD has returned 3.0% p.a. net of fees compared to the Index’s 1.7% p.a., providing net excess returns of 1.3% p.a. FIXD has beaten peers since inception and over 3 years and 5 years.

FIXD has a current running yield of 6.2%* p.a. after management fees. It is rated “Recommended” by the researcher Lonsec. It can and does use gearing.

Click here to learn more about Coolabah Capital Investments.