Fixed income plus
The strategy will suit conservative investors who want stable capital growth without an aggressive investment style. The goal of the strategy is to outperform the dollar bond market in the medium term while given a comparable level of risk. The portfolio risk averaged 7.6% over 10 years, which confirms the strategy's goal. The HYG

HYG - the iShares iBoxx $ High Yield Corporate Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds.

index fund is taken as the

Benchmark is a benchmark, the return on which serves as a model for comparing the performance of investments.

benchmark for this market since the alternative option for the investor is to purchase shares of this fund.
Current yield for 2021
%
6,82%
Estimated yield
(USD)
8,1%
Optimal investment period
from years
2
The strategy uses machine learning
Investor Memorandum
Base currency
USD
Optimal investment period
from 2 years
Minimum entry threshold
300 000$
Estimated yield
8.1%
Management fee
1-1.5%
Success fee
15%
Investor's profile
The Quantum Capital Fixed Income Plus strategy is suitable for investors, who:
Want stable capital growth
Not willing to put up with low deposit rates in banks
Ready for small fluctuations in the value of your portfolio
Understand the disadvantage of selling bonds in a hurry
Comparison of yields
Fixed Income Plus strategy (39.43%) and benchmark fund HYG (7.04%) The yield for 2021 — 6.82%
The effectiveness of the strategy
February 2020 - December 2021
Accumulated yield for the period
39.43%
Portfolio volatility
12.2%
Strategy Sharpe Ratio
3.22
HYG Fund Sharpe Ratio
0.67
Share of months with positive returns
60.87%
Maximum portfolio drawdown
-7.04%
Strategy tools
Given the strategy's goal of outperforming the bond market at comparable risk, portfolio instruments should be broadly similar in type. The HYG index fund consists of high-yield bonds - that is, bonds of companies that are in poor financial condition that may have losses, declining revenues, lots of debts and other complications. By lending to such companies, investors want to be compensated for the risk they take, and so the returns on such bonds are higher than those of quality issuers.
60%
Debt instruments
Debt securities, bond exchange-traded funds
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Debt securities, bond exchange-traded funds
This is the main tool of the strategy. High-yield bonds of the HYG index fund are included in this asset type. They also include "low-yield" bonds - debt of quality companies. With the ability to move away from high-yield bonds, we can reduce the portfolio's credit risk, but increase others such as buying stocks, hybrid instruments or long-dated bonds.
20%
Hybrid instruments
Perpetual bonds, preferred shares, convertible debt instruments
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Perpetual bonds, preferred shares, convertible debt instruments
Secondary instruments of the strategy. These securities are interesting because they are similar to both bonds as well as stocks and therefore offer higher returns than the former.
20%
Other instruments
Stocks and currencies
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Stocks and currencies
These types of assets can be purchased in cases where we are confident in the investment ideas and cannot allow the investor to miss out on the opportunity making money. These assets are enabled to use derivative instruments in order to hedge risks.
ETF
ETN
ETC
All of the above instruments are allowed to be purchased both directly and through ETFs, ETNs, ETCs and structured products
Target portfolio structure
Significant deviations from the target structure are permitted and expected
Approach to investing
When selecting bonds, we take the following approach
Choice of bond currency
Given the goal of the strategy - profitability in U.S. dollars, in most cases we choose the U.S. dollar. However, we can also choose other currencies in case we do not expect currency risks.
Focus on actively traded instruments
High-volume bonds and recently issued securities trade much more active than older instruments, which settle in the portfolios of pension funds and are held there until maturity.
Credit rating
84
Good rating!
Choosing a credit rating
Credit ratings roughly indicate a company's financial condition. The lower the rating, the less stable the company, the higher the bond yields.
Focus on core expertise
in which the managers have expertise. We exclude some sectors, such as pharmaceuticals and biotechnology, due to their specific nature. Also, not wanting to expose investors to the risk of weakening of the tenge, we do not invest in the oil and gas sector and oil-exporting countries.
After selecting bonds using the above filters, we see the overall picture
Bonds above the centerline present a more interesting yield/duration ratio. However, the market demands higher yields from these instruments for a reason - it is possible that these issuers have financial difficulties.
Our task, as managers, is to analyze these companies, their industry, macro-factors, securities, and make a conclusion - how justified such yields are and whether these bonds are worth buying.
Risk management
The goal of the risk strategy
Volatility comparable to the HYG index, i.e., the standard deviation of return should not exceed 7.6% on average
Key strategy risks
Credit, interest rate, and concentration risk. We also consider currency and liquidity risk
Credit risk
The likelihood that the company will not be able to pay its bonds. This happens if the company does not earn enough cash and a "default" occur. To avoid defaults in investors' portfolios, managers carefully analyze companies and the scope of their business and make cash-flow projections.
Interest rate risk
The extent to which changes in interest rates affect instrument prices. When interest rates rise, bond prices fall as investors have the opportunity to place money at higher rates. The higher bond's duration, the higher sensitivity to interest rate changes. To manage this risk, QC forecasts interest rates and their probabilities of change. Depending on that, it decides whether to buy long-term bonds.
Concentration risk
Vulnerability of a portfolio to the results of a single company. If there is only one instrument in an investor's portfolio, he or she is completely dependent on that security's returns. Securities with lower correlation provide better risk diversification.
Currency risk
The probability that changes in exchange rates will lead to losses. However, it arises only when investing in non-dollar instruments. QC intends to purchase such securities only after careful macroeconomic analysis to minimize currency risk.
Liquidity risk
The degree of difficulty in selling the instruments. The higher this risk, the more difficult it is to sell securities in a short period of time and without a meaningful decline in price. This risk is controlled by the choice of more tradable instruments, with higher trading volume in circulation.
How the premium service works
Step 1
Talk about your goals
Fill out an 8-question questionnaire about your attitude toward risk, goals, and investment experience
Fill in the form
Step 2
Define the risk profile
Based on the results of the questionnaire, the manager will determine your risk appetite and type of behavior in financial markets
Step 3
Form a portfolio
We will choose the best strategy based on your goals
Step 4
Help you open an account
Full support at all stages of the process
Open an account
Determine your risk profile in 2 minutes
Answer 8 questions
1 of 9
General Information
2 of 9
Specify your age
3 of 9
What is your experience of investing in the stock market?
4 of 9
Your knowledge of investment instruments
5 of 9
Your horizon for investing in securities
6 of 9
You plan to invest your next share of free cash in securities?
7 of 9
What associations do the word "risk" have with you?
8 of 9
When investing, your first preference will be
9 of 9
Let's simulate a possible market situation. During the correction period, the value of your assets has declined by 10% and your $100,000 investment is valued at $90,000. Your actions:
Investor risk profile
Conservative
An investor with such a risk profile is not ready for portfolio drawdowns of more than 5–10%. Your main focus is to preserve capital and protect it from inflation. The main asset class for investment in this case is bonds, bond funds and money market funds. For a conservative investor, the Quantum Capital Fixed Income Plus strategy will suit his goals.
This questionnaire is not a questionnaire for accurately determining the investment profile of a client that meets all the requirements and rules for carrying out securities management activities. To understand your risk appetite, send the questionnaire to the manager for a detailed consultation. He will determine your type of behavior in the financial markets and select the appropriate investment strategy.
Send the questionnaire to the manager
Fixed Income Plus
Yield for 2021
6,82%
Estimated return
8,1%
Optimal investment period
from 2 years
Investor risk profile
Moderate
With a moderate attitude to risk, the investor is ready for temporary drops in the value of the portfolio by 15-20%. Your main focus: the balance between increasing capital and maintaining it. Therefore, the combinations of asset classes are more balanced here: the investment portfolio includes both stocks and bonds. For a moderate investor, the Quantum Capital Value Equity strategy is suitable.
This questionnaire is not a questionnaire for accurately determining the investment profile of a client that meets all the requirements and rules for carrying out securities management activities. To understand your risk appetite, send the questionnaire to the manager for a detailed consultation. He will determine your type of behavior in the financial markets and select the appropriate investment strategy.
Send the questionnaire to the manager
Value Equity
Yield for 2021
22,0%
Estimated return
13,3%
Optimal investment period
from 5 years
Investor risk profile
Aggressive
An investor with an aggressive risk profile is ready to withstand serious market drops during a crisis (up to 50%). Your primary focus: on maximizing the value of capital. As a rule, such an investor holds most of the portfolio in stocks. For an aggressive investor, the Quantum Capital Value Equity strategy is suitable, where 70% of the portfolio is stocks of American companies.
This questionnaire is not a questionnaire for accurately determining the investment profile of a client that meets all the requirements and rules for carrying out securities management activities. To understand your risk appetite, send the questionnaire to the manager for a detailed consultation. He will determine your type of behavior in the financial markets and select the appropriate investment strategy.
Send the questionnaire to the manager
Value Equity
Yield for 2021
22,0%
Estimated return
13,3%
Optimal investment period
от 5 лет