AXA IM has published the Volta Finance Limited (LON:VTA) monthly report for July 2025. The full report is attached to this release and will be available on Volta’s website shortly (www.voltafinance.com).
Performance and Portfolio Activity
Dear Investors,
In July, Volta Finance achieved a net performance of +2.48% (including a dividend payment of 15.5 cents per share), bringing the Financial Year net performance to +13.9% (August 2024 to July 2025). To frame this performance in perspective with the broader Credit markets, US High Yield returned +8.6% between August 2024 and July 2025, while Euro High Yield returned +8.1% in that same period.
Markets recorded another solid month this July as encouraging developments in trade negotiations, resilient economic indicators and strong corporate earnings fuelled investors optimism. For instance, the United States secured several commercial agreements with key trading partners, easing tariff-related pressures and bolstering expectations for global trade stability. Although initial market reactions were subdued, these agreements helped reduce uncertainty and provided support for risky assets. Nonetheless, caution persisted ahead of the August 1 tariff deadline, particularly given the lack of resolution in negotiations with China.
Economic data presented a mixed yet generally constructive outlook. U.S. labor market conditions remained robust, with declining jobless claims and a rebound in consumer spending during June. Corporate earnings further contributed to the positive sentiment with technology companies reporting strong quarterly results and lifting Equity markets altogether. Inflationary pressures, however, continued to build. The core Personal Consumption Expenditures (PCE) index rose 2.8% year-over-year, highlighting the Federal Reserve’s ongoing challenges. Chair Jerome Powell reaffirmed a data-dependent approach, tempering expectations for imminent rate cuts. Meanwhile, the European Central Bank signalled a more hawkish stance, suggesting its easing cycle may be approaching its conclusion while the Bank of England readied to cut rates further.
Looking closer into Volta’s market technicals, despite very low M&A volumes, loan and CLO issuance kept on being very active throughout the month of July. Repricings surged in the loan market and loan indices recorded strong performance compared to prior months (+0.88% for the US loan market and +0.55% for the European market). This led to inflated secondary loan trading prices and an increase in early redemptions of post-reinvestment period CLO. CLO debt tranches also traded tighter with US CLO BB tranches getting below the 500bps spread. At the opposite, fundamentals remained stable through the month.
As a result of these strong technicals, Volta received some early redemptions both from CLO debts (c.€5m) and CLO Equities (c.€2m equivalent). The Portfolio Management team has actively been looking at re-investing the proceeds with a bias towards the Primary market. In the context of relatively tight CLO markets and well bid Secondary due to reduced supply, cash stood at 17% at the end of the month. This shall give Volta some dry powder to pick-up risk at attractive entry points should volatility rise. Volta Finance’s cashflow generation was stable at €28m equivalent in interest and coupons over the last six months, representing close to 21% of July’s NAV on an annualized basis.
Over the month, Volta’s CLO Equity tranches returned +5.2%** while CLO Debt tranches returned +0.6% performance**. The EUR/USD move to 1.1423 had an impact on our long dollar exposure in terms of performance (+0.46%).
As of end of July 2025, Volta’s NAV* was €274.2m, i.e. €7.49 per share, up 36 cents from July 2024.
*It should be noted that approximately 0.14% of Volta’s GAV comprises investments for which the relevant NAVs as at the month-end date are normally available only after Volta’s NAV has already been published. Volta’s policy is to publish its NAV on as timely a basis as possible to provide shareholders with Volta’s appropriately up-to-date NAV information. Consequently, such investments are valued using the most recently available NAV for each fund or quoted price for such subordinated notes. The most recently available fund NAV or quoted price was 0.14% as at 30 June 2025.
** “performances” of asset classes are calculated as the Dietz-performance of the assets in each bucket, taking into account the Mark-to-Market of the assets at period ends, payments received from the assets over the period, and ignoring changes in cross-currency rates. Nevertheless, some residual currency effects could impact the aggregate value of the portfolio when aggregating each bucket.
