Key Facts

Index Used: Bloomberg AusBond Composite 0+ Yr Index Discretionary/Quantitative: Combination
Peer Group: Fixed Income - Bonds FUM (millions): AU$ 9,071.6m
Investment Style: N/A Fund Inception Date: July 2012
Geographic Mandate: Australia/Global Latest Return Date: May 2022
Investor Type: Wholesale & Retail Status: Open
Minimum Investment: AU$ 10,000 Investment Frequency: Daily

Manager Details

Founded in 2008, Ardea Investment Management is a fixed income investment manager with a focus on delivering controlled returns to clients. Their boutique structure gives them the opportunity to tailor investment solutions to suit their investors' needs and deliver consistent alpha within a risk-controlled framework.

Ardea adopts a unique 'relative value' investment approach which targets reliable risk-adjusted returns that are independent of market direction and exhibit low correlation to broader fixed income and equity markets.

The firm maintains majority ownership by its employees to foster both the long-term alignment of interests with clients and the stability of the investment team, which possesses longevity and diverse experience across global fixed income markets.
Founded in 2008, Ardea Investment Management is a fixed income investment manager with a focus on delivering controlled returns to clients.

Ardea adopts a unique 'relative value' investment approach which targets reliable risk-adjusted returns that are independent of market direction and exhibit low correlation to broader fixed income and equity markets.

Strategy Description

Ardea's Real Outcome Fund adopts the 'relative value' investment strategy to access a wide range of fixed income return sources that are not affected by the level or direction of interest rates.

The investment approach is based on generating returns from relative value strategies that aim to exploit mispricing between comparable fixed income securities which are related to each other and have similar risk characteristics but are priced differently. The Fund seeks to deliver stable returns that are independent of the broader fixed income and equity market fluctuations.

The portfolio is constructed to achieve risk diversification by combining many modestly sized and uncorrelated relative value positions, so that no single position becomes a dominant driver of overall portfolio risk. Ardea believe this approach delivers more stable returns, with lower risk, compared to portfolios with large directional positions that can overwhelm a Fund's risk/return profile.
Ardea's Real Outcome Fund adopts the 'relative value' investment strategy to access a wide range of fixed income return sources that are not affected by the level or direction of interest rates. The portfolio is constructed to achieve risk diversification by combining many modestly sized and uncorrelated relative value positions, so that no single position becomes a dominant driver of overall portfolio risk. Ardea believe this approach delivers more stable returns, with lower risk, compared to portfolios with large directional positions that can overwhelm a Fund's risk/return profile.

Fund Fees

Management Fee: 0.5% Performance Fee: 0%
Buy Spread: 0.05% Sell spread: 0.05%
High Water Mark: N/A Hurdle: N/A

Fund Structure

Offshore/Onshore: Onshore Fund Structure: Unit Trust
Share Classes: AU$ Trustee/RE: Fidante Partners
Administrator: Fidante Partners Prime Broker: N/A
Custodian: Citibank Legal: N/A

Ratings & Availability

Research Ratings

Morningstar Analyst RatingBronze LonsecHighly Recommended (01 Oct 2020) ZenithRecommended (01 May 2018)

Platform Availability

BT Wrap, Colonial FirstChoice, HUB24, Macquarie Wrap, Netwealth, Powerwrap, Asgard, IOOF, MLC Wrap, AMP MyNorth, BT Panorama, mFund, Colonial FirstWrap, MLC Navigator, uXchange, Oasis, Mason Stevens, Praemium

Performance Review

The Ardea Real Outcome Fund has a track record of 9 years and 11 months and has outperformed the Bloomberg AusBond Composite 0+ Yr Index since inception in July 2012, providing investors with an annualised return of 3.64% compared with the index's return of 2.76% over the same period.

The Manager has delivered these returns with 1.56% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 two times over the past five years and which currently sits at 1.06 since inception. The fund has provided positive monthly returns 80% of the time in rising markets and 68% of the time during periods of market decline, contributing to an up-capture ratio since inception of 42% and a down-capture ratio of -21%.

The Ardea Real Outcome Fund returned -0.25% in May, an outperformance of +0.64% compared with the Bloomberg AusBond Composite 0+ Yr Index which fell by -0.89%. Over the past 12 months, the fund's best monthly return was +1% compared with the index's best return of +2.08%, and its worst monthly return was -0.97% vs the index's worst return over the same period of -3.75%.

YearJan %Feb %Mar %Apr %May %Jun %Jul %Aug %Sep %Oct %Nov %Dec %YTD %
2022-0.24-0.970.461.00-0.25NANANANANANANA-0.02
20210.130.140.380.140.14-0.550.00-0.27-0.50-0.690.080.42-0.60
20200.691.26-0.690.520.390.881.160.070.590.540.39-0.115.82
20190.590.671.670.600.931.060.581.190.290.330.21-0.018.39
20180.90-0.110.020.270.520.010.10-0.100.230.640.450.313.29
20170.140.271.150.600.84-0.290.140.220.490.610.290.094.65
2016-0.86-0.780.73-0.130.940.421.250.340.150.580.181.204.08
20151.471.230.780.09-1.51-0.430.370.28-1.190.18-0.37-0.020.83
2014-0.830.770.360.611.220.350.350.40-0.21-0.370.800.433.93
20130.250.930.17-0.020.560.450.55-0.200.090.350.511.325.07
2012NANANANANANA0.02-0.320.611.07-0.12-0.290.97

Only seven years of data shown. Click here to view all data.

Annual Returns

Over the past 12 months, the fund has returned -1.53% compared with the index which has fallen -8.54%, for a difference of +7.01%. Since inception in July 2012, the fund has returned +3.64% per annum, a difference of +0.88% relative to the index which has returned +2.76% on an annualised basis over the same period.

Cumulative Returns

On a cumulative basis (assuming reinvestment of distributions), $100 invested since inception would have become $142. The same amount invested in the index over the same period would have become $130.

Annual Returns %

 
 

Volatility and Risk

Annual Standard Deviation

The fund's returns over the past 12 months have been achieved with a volatility of 1.83% vs the index's 6.01%. The annualised volatility of the fund's returns since inception in July 2012 is 1.94% vs the index's 3.5%. Over all other periods, the fund's returns have been consistently less volatile than the index.

Sharpe Ratio

The fund's Sharpe ratio has ranged from a high of 1.71 for performance over the most recent 48 months to a low of -0.89 over the latest 12 months, and is 1.06 for performance since inception. By contrast, the Bloomberg AusBond Composite 0+ Yr Index's Sharpe for performance since July 2012 is 0.36.

Annual Standard Deviation

 

Sharpe Ratio

 

Performance in Positive Markets

Since inception in July 2012 in the months where the market was positive, the fund has provided positive returns 80% of the time, contributing to an up-capture ratio for returns since inception of 42.31%. Over all other periods, the fund's up-capture ratio has ranged from a high of 55.43% over the most recent 48 months to a low of -6.9% over the latest 12 months.

Performance in Negative Markets

Since inception in July 2012 in the months where the market was negative, the fund has provided positive returns 68% of the time, contributing to a down-capture ratio for returns since inception of -21.11%. Over all other periods, the fund's down-capture ratio has ranged from a high of 9.43% over the most recent 12 months to a low of -8.17% over the latest 60 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months, and a negative down-capture ratio indicates that, on average, the fund delivered positive returns in the months the market fell.

Average Return in +ve Market %

 

Average Return in -ve Market %

 

Sortino Ratio

The fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 3.62 for performance over the most recent 48 months to a low of -1.11 over the latest 12 months, and is 1.78 for performance since inception. By contrast, the Bloomberg AusBond Composite 0+ Yr Index's Sortino for performance since July 2012 is 0.46.

Drawdown

Over the past 12 months, the fund's largest drawdown was -2.16% vs the index's -10.81%, and since inception in July 2012 the fund's largest drawdown was -4.26% vs the index's maximum drawdown over the same period of -11.09%.

Sortino Ratio

 

Drawdown%

 
Fund Index Peer group

Quintile Ranking vs. Average Fixed Income - Bonds as of April 2022

The performance of the Ardea Real Outcome Fund ranked it in the first or second quintile for all KPIs over all time periods.

Over the past 12 months, the fund has returned -1.53% compared with the peer group which has fallen an average of -5.06%, for a difference of +3.53%.

The fund's returns over the past 12 months have been achieved with a volatility of 1.83% vs the peer group's average volatility of 2.76%. The annualised volatility of the fund's returns since inception in July 2012 is 1.94% vs the peer group's 2.78%. Over all other periods, the fund's returns have been consistently less volatile than the peer group.

1 Year
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Ardea Real Outcome Fund
Bloomberg AusBond Composite 0+ Yr Index
Quintile Rankings display Key Performance Indicators (KPI's) against the fund's Peer Group. Each green square ranks the fund in one quintile (or 20%) of its peer group - five green squares indicate the fund is in the best quintile for each KPI. The performance of the peer group's underlying index is shown by a red dot.