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High-yield EM bonds

What does the strategy invest in?

Bonds of EM issuers

Who is it for?

Conservative investors who seek a higher return than high-yield bonds with relatively low risks

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Target parameters

Target return: 6-8% per annum in US dollars*
Risk: Corresponds to the risk of the money market
Investment horizon: One year or longer
Withdrawals: Anytime

* see below for details about how the expected return is achieved

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Investment strategy

What makes the strategy special

Fund returns are historically higher than global high-yield bond indexes amid lower volatility — interest rate risk is eliminated and credit risk is greatly reduced by the portfolio’s short duration.

Strategy objective

The strategy seeks to capture absolute income in dollar terms. It returns more than peer benchmarks even during market downturns, including the 2021-22 market correction.

How we do it

We invest in bonds of EM issuers. The portfolio is built almost entirely from short-duration bonds (most have a duration of 1-2 years) with credit ratings from B- to BB+.

Fund

Fund facts and investment terms

Fund name GFM COSSACK BOND COMPANY LIMITED
Fund type Offshore under the laws of the Cayman Islands
Base currency USD
Dividend Policy No dividends (income accumulated)
Leverage max 20% of the NAV
Subscriptions and Redemptions Monthly
Fund expenditures Up to 0.3% of assets per year
Management Fee 1.5% of the average monthly Net Asset Value
Performance Fee 20% over a benchmark of One Year SOFR
Broker/Custodian VP Bank 
Administrator Cyprofund Administration Services Ltd
Legal Advisers to the Company Collas Crill
Auditors Moore Professional Services Ltd
Minimum investment USD 100 000
Database Bloomberg

High-quality infrastructure arrow
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Cossack is serviced by supported by reliable administrator, banks and brokers and auditors. The structure carries no operational risk and offers investors a transparent history of funds which can be easily presented to any financial services provider or regulator.

Results

Cossack Fund JP Morgan EMBI Plus Index Bloomberg Global High Yield Index HFRX Fixed Income - Credit Index

Results

Return of Cossack fund and peer benchmarks for periods
  • Cossack Fund
  • JP Morgan EMBI Plus Index
  • Bloomberg Global High Yield Index
  • HFRX Fixed Income - Credit Index
 

Return for period

 

 Annual return
since Dec. 31,
1999, %

Annual volatility
since Dec. 31,
1999, %

3-year, %

1Y, % YTD, %
Cossack Fund 11,0 6,9 4,3 17,0 12,8
JP Morgan EMBI Plus Index 6,1 10,1 -8,4 6,3 4,6
Bloomberg Global High Yield Index 6,7 10,1 -0,3 10,7 9,6
HFRX Fixed Income - Credit Index -1,9 3,7 3,4

Risks

Risk management

Interest rate risks arrow
Credit risk of the issuer arrow
Currency risks arrow
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Description Bond prices could change in response to changes in rates or rate expectations

Risk management method The fund's portfolio generally has short duration. According to data as of October 2023, its duration was 1.18 years, versus 4.1 years for the Bloomberg Global High Yield Index. The short duration significantly reduces interest rate risk, basically allowing investors to ignore it.

Description Payment of obligations could be delayed

Risk management method A thorough, comprehensive analysis of bond issuers is complemented by diversification. The fund’s rules do not allow one issue to account for more than 10% of investments, and generally it is no more than 3-4%. Indeed, the fund usually takes on much less credit risk: over the last 60 months, it has a weighted average of 74.5 positions in the portfolio. The maximum leverage is set at 20% of assets under management.

Description The dollar could strengthen against the currencies in which investments were made

Risk management method The fund invests and calculates returns in US dollars, and when necessary hedges currency risks against the US dollar. The fund may invest in soft-currency bonds, but these investments typically do not exceed 10% of the fund's portfolio. If there is a strong conviction that the dollar is seeing a period of weakening, these investments may be increased in the short term.

Gleb Shestakov Cossack Fund manager
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Gleb has 27 years of experience in managing investments in EM debt securities. He went to Moscow State University and, having received a Soros Scholarship, studied at Oxford University. He initially worked as a journalist in England, and then from 1991 was a management consultant for a number of Russian projects in London and Moscow. In August 1992, he founded and became the managing director of Global Fund Management SA. In 1995, he structured the first fund solely dedicated to investing in Russian and CIS fixed income instruments – the Templeton Russian and East European Debt Fund – and served as an investment adviser for the fund. In 1997, he started GFM Cossack Bond Co. As a managing partner of Global Fund Management, he comanages over $100 mln in assets.  

Richard Oliver Bernays Independent director of Cossack fund
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Richard joined Mercury Asset Management Plc in 1971, serving as vice chairman from 1987. In 1992-96, he was chief executive of Hill Samuel Investment Management Group. In 1997-2001, he was a CEO of Old Mutual International and Capel Cure Sharp. He has served as a director of a number of investment trust companies. He is currently a trustee of the NMR Rothschild and chairman of The Quantum Group, a private company that builds and runs care homes and retirement living accommodations. 

Roberts Idelsons Independent director of Cossack fund
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Roberts started his career at Trasta Komercbanka bank in Riga in 1996, heading up the securities department there. In 2003, he joined Parex Group as a president and CEO of Parex Asset Management IPAS (currently CBL Asset Management). He spent three years in Moscow in 2010-13 as an executive director in M2M Bank Private. He then moved back to Riga, where in June 2013 he was appointed chairman of the management board of Bank M2M Europe AS. During his career, Roberts has also held a number of BoD positions in Latvia, Russia and Switzerland, including BoD chairman at AP Anlage and Privatbank (Switzerland). 

Dear friends!

This website page is operated by GFM Cossack Bond Company Limited registered as a mutual fund under the Mutual Funds Law (as amended) of the Cayman Islands with company registration number CR-73714.

To verify https://www.cima.ky/upimages/commonfiles/QuarterlyListofallMutualFundsregisteredandlicensedwiththeCaymanIslandsMonetaryAuthority-30June2021_1625765870.pdf

The registered office of company:
Floor 2, Willow House, Cricket Square, PO Box 709, Grand Cayman, KY1-1107, Cayman Islands 

Investors
Only Eligible Investors who are Non-U.S. Persons could invest in GFM Cossack Bond Company Limited.

Compliance Information
The views expressed herein do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of GFM Cossack Bond Company Limited and no assurances are made as to their completeness or accuracy. An investment in GFM Cossack Bond Company Limited should be viewed as a means of diversification within the context of an overall investment portfolio, and an investment should be made only after consulting with independent and qualified sources of investment and tax advice. No information on this site constitutes investment, tax, legal or any other advice.

If you are unsure about the meaning of any information provided, you must consult an appropriate regulated financial or other professional adviser. An investment in GFM Cossack Bond Company Limited is speculative and involves a high degree of risk. An investment in the products referred to in this website is suitable only for investors who can afford to lose all or a portion of their investment. No one should commit to invest a large percentage of their readily marketable assets in GFM Cossack Bond Company Limited. There can be no assurance that the investment objective of any of the products will be achieved and investment results may vary substantially over time. Investment in any of the products is not intended to be a complete investment program for any investor. Past performance is not a guarantee of future performance. The price of units or shares can go down as well as up and may be affected by changes in rates of exchange. Income from investments may also fluctuate and be affected by changes in the rates of exchange. Data is complimentary to and not a substitute for independent professional advice from a person qualified to provide it in your home country. The information contained on this website is subject to copyright with all rights reserved.

I certify that I have read the above information and that I am a qualified investor and non-U.S. resident.

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Privacy Policy

Last updated: 13.05.2022

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As of 25 May 2018, the EU General Data Protection Regulation 2016/679 (GDPR) have taken effect for the protection of natural persons against the processing of personal data and the free circulation of such data. The New General Regulation shall replace the Directive 95/46/EU which was applied via law 138(I)/2001. As of 25 May, 2018 the said law shall be considered as abolished.

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As a data subject you may address any concern of yours on a matter relating to your data protection rights to the company’s Data Protection Officer below.

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The past is not an indication of the future performance of an investment. The value of investments may be subject to fluctuations and investors may not get back the amount invested. Changes in rates of foreign exchange may also cause the value of investments to go up or down.

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Links to third-party websites on this website are provided solely for your convenience as pointers to information on topics that may be useful to users of this website. Movchan’s Group has no control over the content on such third-party websites. Activating some links to third-party websites on this website may cause you to leave this website. No warranties or liability concerning the content of such websites are made, including assurances that it is correct, accurate, complete, true, up-to-date or fit for any particular purpose. Nor does Movchan’s Group warrant that such website or content is free from any claims of copyright or trademark or other infringement of the rights of third parties or that such site or content is free of viruses or other harmful components. No guarantee as to the authenticity of documents on the Internet is given.

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For information on the kind of data collected, the purpose for which it is collected, how it is processed, to whom it may be disclosed and the security measures that have been put in place to protect it, please consult the Movchan’s Group Data Privacy Policy.

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High-quality infrastructure Cossack is serviced by supported by reliable administrator, banks and brokers and auditors. The structure carries no operational risk and offers investors a transparent history of funds which can be easily presented to any financial services provider or regulator.
Interest rate risks Bond prices could change in response to changes in rates or rate expectations
Credit risk of the issuer Payment of obligations could be delayed
Currency risks The dollar could strengthen against the currencies in which investments were made
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