Profit from a rising US dollar and rising interest rates
Coolabah Capital Investments offers unique global fixed-income strategies denominated in US dollars. Over the last 12 months to 31 August 2022, the US dollar has appreciated 6.9% against the Aussie dollar.
Before accounting for these currency gains, Coolabah’s Smarter Money Higher Income floating-rate bond strategy, denominated in US dollars, generated positive returns after fees over this period despite huge global financial market volatility (up 0.61% before fees or 0.05%* after fees). At the same time, the AusBond Composite Bond Index declined by 11.5% while the S&P 500 Index slumped 11.3%.
Floating-rate bond strategies generally benefit from rising short-term interest rates. Coolabah’s Smarter Money Higher Income strategy has seen its yield to maturity jump from 1.8% in 2021 to 4.8% at the end of August 2022. It is currently over 5%.
If you would like to reduce your Aussie dollar risk by obtaining exposure to the US dollar, you can apply to invest in the Smarter Money Higher Income strategy’s USD unit class. Coolabah’s Long Short Credit Fund also offers a USD unit class.
Smarter Money Higher Income Fund - USD Investor Class
The Smarter Money Higher Income Fund - USD Investor Class (APIR: ETL3997AU) is a zero duration, short-term fixed-interest investment solution that targets returns that outperform the US Federal Funds Target Range by 1.5% to 3.0% p.a. after all fees, over rolling 12 month periods.
It gains exposure to an actively managed portfolio of Australian cash securities and investment-grade floating-rate notes with a target dollar-weighted average credit rating in the “A” band hedged to US dollars. It does not invest in fixed-rate bonds (unless interest rate risk is swapped out) or equities.
Smarter Money Long-Short Credit Fund - USD Investor Class
The Smarter Money Long-Short Credit Fund - USD Investor Class (APIR: ETL7843AU) targets returns above the US Federal Funds Target Range plus 4% to 6% p.a. after all fees, over rolling 3 year periods.
This strategy offers investor exposure primarily to senior and subordinated bonds, hybrids and derivatives, hedged to US dollars. The Smarter Money Long-Short Credit Fund targets holding the majority of its portfolio in investment-grade quality debt securities.
This strategy can take “long” or “short” positions in relation to assets which are considered are trading below or above fair value. The goal is to generate significant risk-adjusted returns, or “alpha”. The ability to go long or short, either directly or through using derivatives, means it can profit from bond price rises and price falls.
Click here to find out more about Coolabah and the US Dollar strategies.