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Volta invests in a broad portfolio of structured finance assets, maintaining flexibility to optimise long-term returns in highly dynamic markets. Its five-year 12.9% p.a. shareholder return has been generated by predictable coupons and dividends, and not from capital gains. Volta’s long-term NAV returns have beaten those of peers for an in-line volatility. Its deep market understanding has identified assets mis-priced for risk. Economic downturns create opportunities, as well as threats.

  • Volta monthly report: In August Volta’s NAV rose 1.2%, taking it to €8.46 and the year-to-date (YTD) performance to +5.4%. The five-year performance has been +12.9% p.a. The overall portfolio mix was largely unchanged by asset class. The top five underlying exposures remain under 2.5% of NAV.
  • Peers’ monthly reports: Carador reported a 0.25% rise in its $ NAV (YTD 2.79%). Fair Oaks Income reported that its NAV was down 0.09% in August. Blackstone GSO Loan Financing reported that its € NAV rose 1.46% in the month (YTD 4.45%). TwentyFour Income Fund reported a 0.5% rise in NAV (YTD 2.96%).
  • Valuation: Volta trades at a 15% discount to NAV. Peer-structured finance funds, and a range of other debt funds, on average, trade at small premia. In the medium term, Volta has delivered faster NAV growth than its immediate peers and an in-line volatility, making this discount an anomaly.
  • Risks: Credit risk is a key sensitivity (Volta has a widely-diversified portfolio). We examine the valuation of assets, highlighting the multiple controls to ensure its validity. NAV is affected by sentiment towards its own and underlying markets. Volta’s long $ position is only partially hedged.
  • Investment summary: Volta is an investment for sophisticated investors, as there may be sentiment-driven, share-price volatility. However, long-term returns have been good: 12.9% p.a. returns (dividend re-invested basis) over five years. The current portfolio expected NAV return is similar. The yield is 8.6%, and we believe it will be covered by predictable income streams.