Investment Objective

To generate superior return that is more predictable and unhindered by the constraints of a traditional bond benchmark, while enhancing investor return by using leverage.

Key Advantages

• • Quality assets: Investment grade bonds (minimum 75%)

• • Short duration (circa 2 years) with no material impact of interest rate change

• • Low volatility

• • Excellent returns of 8% - 10% p.a.

• • No forex risk (US dollars only)

• • Enhanced returns, prudent use of non-recourse leverage

• • Quarterly dividend distribution, pre-determined cash inflow for investors

• • Well diversified portfolio of over 100 bonds

• • Liquid open-ended fund with weekly subscription/redemption

• • State-of-the-art risk management system, using proprietary cash flow modelling.

• • As interest rates go up, performance is likely to improve due to short reinvestment period.

• • Strong track record of over 7 years.

Fungible Cash Flow Modeling

The key risk of investing in fixed income securities is the redemption risk. Silverdale’s core competency is its proprietary Cash Flow Modelling based on fungible cash (SCFM), which provides us insight into the bond issuer’s Ability to Pay and Willingness to Pay. SCFM is the core of our investment process:

Quant Filters: Proprietary algos to scan and sieve the investment universe

– EM $2 trillion; 150k+ bonds with duration 0.5 to 6 yrs; 5 000 tracked; 500 actively followed

Proprietary cash flow modelling

– Based on fungible cash and legal review of the terms of issuance, structure and waterfall

Team Review

– Consensus based approach with CIO negative veto

Risk-based Allocation

– Portfolio sizing based on implied risk (Duration Times Spread) – Internal and external investment restrictions with strict stop-loss and pro-active re-sizing of investment positions

Trade Execution

– Best execution with no conflict of interest (no soft dollars)

Learnings

– Constant feedback loop from micro/macro news, trading desk, and strategic positioning Beyond credit filters such as credit rating of bonds, duration, YTM, etc., we deploy SCFM based on Legal Review of bond covenants, and proprietary Silverdale Risk Management Protocol (SRMP) to select bonds with superior risk-adjusted returns. Our Duration Management, Diversification & Optimization is built on a robust Risk Management System.

NAV and Performance

  Cumulative Annualised

Year to Date

-

Trailing 1 month

-

Trailing 12 months

39.46%

-

Trailing 3 years

12.34%

4.23% p.a.

Trailing 5 years

32.93%

5.85% p.a.

Since inception

70.79%

7.32% p.a.

Portfolio Characteristics