FUND DESCRIPTION
[divider line_type=”Small Line” line_thickness=”1″ divider_color=”extra-color-3″ animate=”yes” custom_height=”20″ custom_line_width=”104″][divider line_type=”No Line” custom_height=”42″]The TwinRock Value Opportunity Fund is a credit investment fund focused on the debt obligations of corporate borrowers. The fund invests in bonds and loans of corporate issuers in the high grade and non-investment grade rating categories. The fund seeks to deliver steady income and in appropriate market conditions capital appreciation by holding securities with substantial yields which are remote from default. The fund employs leverage to enhance return and may invest in equities and derivatives at the fund manager’s discretion. The fund does not compete with a benchmark; the fund seeks absolute returns which exceed long-term equity averages, with the substantially lower risk and volatility that is associated with higher quality bonds.
Quarterly Update & Market Outlook
[divider line_type=”Small Line” line_thickness=”1″ divider_color=”extra-color-2″ animate=”yes” custom_height=”20″ custom_line_width=”104″][divider line_type=”No Line” custom_height=”42″]Following the recovery in credit in the 2nd quarter, we have made modest changes to the portfolio to reflect the increasing downward pressure across the yield spectrum resulting from macro-economic risks in Europe and Asia. Greater uncertainty favors credit rather than quity when accounting for volatility in our view.
Our Long-term view remains that the credit cycle widening which began in June 2014 reached a climax in Q1 2016, as evident in the capitulation in bond prices of weakest segments (Energy, Industrials) in the High Yield bond market. We would approach further volatility in bond prices – particularly in the mid-quality BB rating category opportunistically. The portfolio continues to benefit from duration and correspondingly, enhanced returns have been achieved with largely investment grade quality bonds (with the lower credit risk associated with such positions.