JOHCM Credit Income Fund (JOCIX)

Back

Fund Description

The JOHCM Credit Income Fund is managed by Giorgio Caputo, Senior Fund Manager and Head of Multi-Asset Value and Adam Gittes, Senior Fund Manager and Head of Credit. They are supported by the members of the New York-based Multi-Asset Value team.  The Fund seeks competitive current income through a flexible, global corporate credit allocation appropriate for risk-aware investors.

Investment Strategy

Fund managers Giorgio Caputo and Adam Gittes seek to build a portfolio that reflects their investment views across the fixed income markets that is consistent with the Fund's objective of preserving capital and delivering returns through a combination of income and modest capital appreciation. They seek to avoid the permanent impairment of capital while identifying investments in companies that produce resilient income streams. The Fund employs a conservative approach that prioritizes capital preservation without reaching for yield.

The Fund employs a highly analytical process that focuses on evaluating an investment's durability and capacity; financial position (particularly cash flow), stability of revenues and cost structure; and corporate and legal structure.

As market conditions change, the volatility and attractiveness of sectors, securities and strategies can change as well. To optimize the Fund's risk/return, the portfolio managers may dynamically adjust the mix of different asset class exposures.

 

Investment Objective

The investment objective of the JOHCM Credit Income Fund (the "Fund") is to preserve capital and deliver returns through a combination of income and modest capital appreciation.

The Fund invests, under normal circumstances, at least 80% of its net assets in fixed income securities across a wide range of maturities. The securities can include investment grade corporate debt, high yield securities, convertible bonds (including contingent convertible bonds), preferred stock, floating-rate debt, collateralized debt, municipal debt, foreign debt (including emerging markets), commercial paper, loans and loan participations. The Fund may also invest up to 10% of its net assets in dividend paying equities of companies of any size.

 

Other Multi-Asset Equity Funds

JOHCM Global Income Builder Fund (JOBIX)

The JOHCM Global Income Builder Fund is managed by JOHCM’s New York-based Multi-Asset Value team, which includes Senior Fund Managers Giorgio Caputo, Adam Gittes and Robert Hordon and Fund Manager Remy Gicquel.

Read More
Back

Fund details

Fund inception date 17 August 2020
Benchmark Bloomberg Barclays US Aggregate Index, ICE BofAML BB-B Global High Yield Constrained Index
Share classes
Institutional (Launch date) 17-August-2020
Advisor (Launch date) 17-August-2020
Investor (Launch date) 17-August-2020
Minimum investment
Institutional $1,000,000
Advisor $0
Investor $0
Fund codes
Fund Ticker Share Class Fund Number CUSIP
JOCIX Institutional 688 46653M740
JOCEX Advisor 488 46653M732
JOCMX Investor 588
Fees and Expenses
Fund Ticker Share Class Net Expense Ratio* Gross Expense Ratio*
JOCIX Institutional 0.59% 1.60%
JOCEX Advisor 0.69% 1.70%
JOCMX Investor 0.84% 1.85%

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

Administration

Investment Advisor JOHCM (USA) Inc.
Transfer Agent Northern Trust
Custodian Northern Trust

Strategy Highlights

As at 31 December 2022

Martin Sheen played President Jed Bartlet on the NBC TV show The West Wing in the early 2000s. Often, after wrapping up some stressful or momentous piece of the story, he would say, “What’s next?” We find ourselves as investors constantly asking the same thing. After all, markets are forward looking, and so should we be. A common investing mistake can come from looking backwards and assuming the recent past is a good predictor of what will come. The constant drumbeat in our minds is “What’s next?” and most times, that’s enough to spur meaningful insights on what is to come.

As we embark on 2023, the common worries that pervade the market at the end of 2022 are well established: 1) Are we headed for a recession? (If so, it will be the most highly anticipated recession of our careers), 2) Will inflation get under control, and will the Federal Reserve have to raise rates meaningfully beyond what the market expects? The answers, as always, are never clear until they are retrospective. Perhaps, this one time, the best way to figure out how these two questions resolve themselves in 2023 might be to look back at 2022. Rather than assuming last year will continue, it seems likely this year will have to be very different. One year ago, the Federal Funds rate was at 0%, and the market predicted fewer than four 25 basis point increases throughout the year. That’s right, it’s easy to forget, but the market was predicting Federal Funds of 0.9% at the end of the December Federal Reserve meeting. Instead, the market got a Federal Funds rate of 3.5% higher! Even more importantly, the generic 10-year US Treasury yielded merely 1.75% in January but over 3.75% at the end of the year. This led to the Barclays Aggregate Index falling over 11% during the year, high yield bonds lost over 11%, and investment grade corporate bonds lost over 15%.

As a bond investor, what are the most significant realistic risks this year? The questions above point to the two ever-present risks associated with owning a bond – credit risk and duration risk. If the answer to question 1 above is ‘yes, we are headed for a recession’, then credit risk could be a key driver of negative returns for bonds, but especially for lower quality bonds. In the event of a recession, spreads could move wider by at least 200 basis points for high yield bonds from around 450, where they closed in 2022. In a sell-off induced by a bad recession, high yield spreads typically approach or exceed 1,000 basis points. That doesn’t seem likely at present, but it rarely does. In the same sort of downturn, we would anticipate investment grade bond spreads to stay anchored closer to existing levels. As such, our current bias remains in higher quality names until we are more convinced that no recession is imminent.

Question 2 above has recently gotten the most attention because the market got the answer so terribly wrong for much of 2022. What would it mean to be wrong on rates this year? Last year it meant missing the Federal Funds rate by 350 basis points and the 10-year Treasury yield by over 200 basis points. That magnitude of error seems highly unlikely this year, given that inflation appears to have peaked, and the question now centres more on where the inflation rate settles once it has finished cooling off. The highest estimate we have heard for the terminal Fed Funds rate seems to be 6%, but that’s only 100 basis points higher than the market has currently priced. Said another way, the downside to owning bonds is dramatically smaller now than it was a year ago. Intuitively, the upside to owning them is also much better than it was a year ago – both because yields are much higher and because there’s a real chance that economic conditions force rates lower.

Last year, we became wary first of duration risk and then of credit risk relatively early in the year. As such, the Credit Income fund outperformed (beat the U.S. Aggregate Bond Index by over 4.5%, beat the ICE BAML BB-B Global High Yield Constrained Index by over 4.5%, beat the U.S. Investment Grade Index by nearly 7%). As central banks lift short rates, our fear of duration will wane. We are still cognizant that credit spreads could pose a material risk, so, for the time being, our positioning will probably be on the side of higher in the ratings scale. As
ever, we will be vigilant in our search for data points that disprove this fear, or information that contests are growing comfort with duration. In the meantime, we will continue our never-ending search for idiosyncratic single-name opportunities while wondering “What’s next?”

 

Sources for all data: JOHCM/Bloomberg (unless otherwise stated).

Monthly returns (%)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

Important Information

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and 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. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

Historical performance of the International Select Fund for Class II Shares prior to its inception is based on the performance of Class I Shares. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

Top 10 holdings and active weights

Fund

As at noon Share class Currency CUSIP Number NAV Change Change % Previous
JOHCM International Select Fund 16/04/2024 Institutional USD 46653M849 23.49 -0.34 -1.43% 23.83
Investor USD 46653M823 23.55 -0.34 -1.42% 23.89
JOHCM Emerging Markets Opportunities Fund 16/04/2024 Advisor USD 46653M203 10.93 -0.18 -1.62% 11.11
Institutional USD 46653M104 10.95 -0.18 -1.62% 11.13
Investor USD 46653M302 10.91 -0.18 -1.62% 11.09
JOHCM Global Select Fund 16/04/2024 Advisor USD 46653M807 13.21 -0.07 -0.53% 13.28
Institutional USD 46653M708 13.24 -0.07 -0.53% 13.31
JOHCM Emerging Markets Discovery Fund 16/04/2024 Advisor USD 46653M500 14.20 -0.11 -0.77% 14.31
Institutional USD 46653M401 14.18 -0.12 -0.84% 14.30
JOHCM International Opportunities Fund 16/04/2024 Institutional USD 46653M872 12.12 -0.15 -1.22% 12.27
Regnan Global Equity Impact Solutions 16/04/2024 Institutional USD 46653M716 7.81 -0.08 -1.01% 7.89
TSW Large Cap Value Fund 16/04/2024 Institutional USD 46653M641 12.69 -0.08 -0.63% 12.77
TSW Emerging Markets Fund 16/04/2024 Institutional USD 46653M666 8.95 -0.12 -1.32% 9.07
TSW High Yield Bond Fund 16/04/2024 Institutional USD 46653M658 9.01 -0.02 -0.22% 9.03

Important Information

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and 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. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Any Indicies mentioned are unmanaged statistical composites of stock market performance. Investing in an index is not possible.

Historical performance of the International Select Fund for Class II Shares prior to its inception is based on the performance of Class I Shares. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until January 28, 2024.

10 Nov 2021

Global Value and Income Dispatch

Stewarding capital through regime transitions

27 Jul 2021

Global Value and Income Dispatch

Inflation Now; Deflation Later? And Aligning Capital with Labor

24 Jun 2021

Global Value and Income Dispatch

Responsible income: is it time to take your last puff?

08 Jun 2021

Global Value and Income Dispatch

Ten thoughts for the new inflationary regime 
 

11 May 2021

Global Value and Income Dispatch

Should Credit Investors Panic About Rates?

21 Apr 2021

Global Value and Income Dispatch

Don’t let rising rates erode your income assets!

15 Apr 2021

Global Value and Income Dispatch

Fishing in the right ponds: responding to shifts in market regime

02 Feb 2021

Global Value and Income Dispatch

Managing through rising rates with “2020 Hindsight”
 

02 Nov 2020

Global Value and Income Dispatch

Q3 review: The rise of tangible capital?
 

22 Jul 2020

Global Income and Value Dispatch

Q2 review: the global income challenge
 

07 Apr 2020

Global Value and Income Dispatch

Q1 review: In the midst of chaos, there is also opportunity

17 Mar 2020

Global Income and Value Dispatch

Why worried investors shouldn’t be like Alice in Wonderland

06 Mar 2020

Global Value and Income Dispatch

Falling knives, iron gloves and The Shawshank Redemption: thoughts on the coronavirus from the JOHCM Multi-Asset Value team. 

05 Feb 2020

Global Value & Income Dispatch

Q4 Review: What are you paying for today?

26 Nov 2019

Global Value & Income Dispatch

Don't pay too much attention to the default rate. It's rating migration that matters. 

04 Nov 2019

Global Value & Income Dispatch

Q3 Review: Bifurcation and what the averages don't tell you...

29 Oct 2019

Credit market review - Q3 2019

Lale Topcuoglu reviews developments in the credit markets over Q3 2019 

09 Aug 2019

Global Value and Income Dispatch

Quality traps, liquidity voids and central bank puts. 

10 May 2019

Global Value and Income Dispatch

What do Swiss cheese and high yield covenants have in common? A lot of holes!

25 Apr 2019

Global Value and Income Dispatch

Blink and you might miss it! – the bottom-up advantage

01 Feb 2019

Global Value and Income Dispatch

Strategies for the next market and on being greedy when others are fearful

23 Jan 2019

Global Value and Income Dispatch

Beware of the liquidity illusion in the quest for higher yields.

27 Nov 2018

Global Value and Income Dispatch

Should investors buy because prices are lower or sell because the economy may be slowing? Giorgio Caputo, JOHCM Global Income Builder Fund, provides his view.

13 Oct 2018

Global Value and Income Dispatch

An insight into the JOHCM Global Income Builder Fund - A fund for all seasons 

28 Aug 2018

Global Value and Income Dispatch

Looking for income? Three reasons to go global
 

29 Jul 2018

Global Value and Income Dispatch

Duration as a diversifier: Giorgio Caputo, Senior Fund Manager of the JOHCM Global Income Builder Fund, provides an update on portfolio positioning. 

01 May 2018

Global Value and Income Dispatch

It is our great pleasure to update you on JOHCM Global Income Builder Fund’s (JOBIX) first full quarter of operation.

No Data

Prospectus

An investor should consider the Fund’s investment objectives, risks, and charges and expenses carefully before investing or sending any money. This and other important information about the Funds can be found in the Fund’s(s) prospectus or summary prospectus which can be obtained at www.johcm.com or by calling 866-260-9549 or 312-557-5913. Please read the prospectus or summary prospectus carefully before investing. The Perpetual Americas Funds are advised by JOHCM (USA) Inc. and distributed through Perpetual Americas Funds Distributors, LLC, member FINRA. The Perpetual Americas Funds are not FDIC-insured, may lose value, and have no bank guarantee.

Risks

Fixed income securities will increase or decrease in value based on changes in interest rates. If rates increase, the value of the Fund’s fixed income securities generally declines. If interest rates fall, the value of fixed income securities generally increase. Long-term fixed income securities or instruments will normally have more price volatility because of this risk than short term fixed income securities or instruments. Below investment grade fixed income securities, also known as “junk bonds,” are not investment grade and are generally considered speculative because they present a greater risk of loss than higher quality debt securities. Investors should note that investments in foreign securities involve additional risks due to currency fluctuations, economic and political conditions, and differences in financial reporting standards. Other risks may include and are not limited to liquidity, loan-related, currency, hedging, derivatives and credit risks.

For a better experience, we recommend viewing this website in landscape orientation.

Webcast

×

JOHCM

×

Regnan

×