The high performance low risk nature of CRAFT’s underlying commodity finance enables us to provide investors with reliable fixed income returns which pay genuine risk adjusted returns for the underlying risk, even when markets are in turmoil.
LOW DEFAULT RATES
Less than 0.1% even during times of economic distress
CREDIT QUALITY
Only established Tier 1 and 2 borrowers in Tier 1 markets
QUALITY OF SECURITY
CRAFT knows the liquidated value of its security at all times
FIXED INVESTMENT TERMS
Unlike many investment products where the issuer can very terms CRAFT’s investment terms are fixed so investors always know where they stand
Risk Adjusted Returns
Risk-adjusted return measures how much return an investment generates relative to the risk taken to achieve it.
It’s not just about how much you made, but whether the return was worth the risk.
Why risk-adjusted returns matter:
Two investments can both return 10%, but if one is very volatile or has a higher probability of losing capital (high-risk) and the other is stable (low-risk), the safer investment has the better risk-adjusted return.
Investors, credit committees and regulators (such as Basel III for Banks) focus on returns ‘per unit of risk’ rather than the raw return. This is commonly measured using the ‘Sharpe Ratio’
CRAFT fixed income investments offer a higher return ‘per unit of risk’ compared to other private credit investments.
Historically Low Default Rates for CRAFT’s Underlying Credit Market
Over the past 25 years and across every major economic shock, CRAFT’s commodity finance market remains the most resilient credit market.
At less than 0.1% historical default rate, CRAFT’s commodity finance market sits at the very bottom of the credit risk spectrum, even during times of global market crisis.
Why? Because essential markets such as materials, energy and food must continue to flowing order for society to function. Commodity trade is trade that cannot stop.
CRAFT’s Credit Market vs Real Estate Defaults during the GFC – 0.3% vs 10.5%
- CRAFT offers a distinct advantage over traditional private credit funds, with lower market correlation and materially lower default risk compared to other forms of lending such as real estate
- Unlike managed income funds, CRAFT’s investments are structured to prevent discretionary control by an investment manager over redemptions or distributions.
- Interest payments cannot be suspended, providing investors with greater predictability and contractual certainty
- CRAFT investments are designed to perform to label in all markets and remain consistent during times of economic stress
