Following the successful public launch of the Invictus Margin Lending Fund (IML) on the 15th of October, inflows have been strong as the fund has attracted investors seeking a higher yield than what traditional instruments, or even DeFi, can deliver.

The IML Fund offers investors a unique opportunity to take advantage of a nascent market that provides consistent returns well above traditional money market yields. Investors will be hard-fought to find yields in excess of 10% in dollar terms, without the risk of significant drawdown or volatility of earnings. Fund participants are therefore able to customize their own investment time horizon, without having to worry about the risk of short term capital loss, all while earning yields synonymous with high-risk equity markets.

With the significant 30% spike in the Bitcoin price on 25 October, USD and stablecoin lending rates surged. This created an opportunity for the fund to lock in higher rates than previously encountered since inception, some as high as 22% annualized per day. This was only able to occur due to the quick reaction of the fund managers as the rates soon withdrew to normalized levels.

Investors can expect minor fluctuations in the fund NAV due to a portion of the Fund being held in USD stable coins such as USD Tether (USDT). The IML Fund is valued in USD terms and therefore when the price of USDT experiences minor oscillations, the IML fund may experience a very slight drop in the NAV, as illustrated on the 7th November in the below graph. This is usually temporary and the reverse may also occur if the stablecoins trade above their peg.