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Axonic Managing Director, Travis Printz, opened the latest fund update from Axonic’s New York headquarters with a snapshot of performance and positioning. The strategy has returned 2.38% year to date as of 5/20/2025, maintains a 6.5% monthly distribution, and holds $3.15 billion in AUM. With a 5-star Morningstar rating, the portfolio continues to focus on RMBS, CMBS, and ABS exposures.
Short Duration, High Quality
Portfolio Manager Ben Bernstein described a continued emphasis on “highly credit-protected, high-in-the-capital-stack, shorter-duration, highly cash-flowing bonds.” Yield to maturity stands at 7.25%, with spread duration at 1.8 years and rate duration at 2.1 years.
Housing and Consumer Credit
Bernstein remains constructive on the housing sector, supported by low supply and stable national fundamentals. The portfolio holds legacy RMBS, non-QM loans, and residential transition loans. In ABS, exposures center on short-duration, senior bonds tied to unsecured consumer credit and aviation, underwritten with conservative assumptions and structural protection.
Targeted CMBS Exposure
Portfolio Manager John Salter emphasized the fund’s focus on single-asset, single-borrower CMBS and its aversion to conduit deals with limited visibility into collateral. “We are certainly overweight in the multifamily sector… we also find opportunity in the extended stay hotel space because of similar supply-demand dynamics,” he said, whereas office exposure remains challenging.
Liquidity as a Strategic Tool
With regular paydowns – $60 to $100 million per month – the portfolio maintains ample cash to act on opportunities without forced selling. “We think about times of turbulence on a daily basis,” said Bernstein. “We’re very comfortable with what we own, and we’re ready to play offense because we’ve played a solid defense.”
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