The Investment Committee team presents its January 2025 newsletter, where we share insights surrounding the Capital Pool and Nexus Mutual’s investments. The goal is to make key data transparent and easily accessible to everyone.
State of the Capital Pool
Monthly Change - ETH value
The Capital Pool decreased by 3.88% in ETH terms this month. Withdrawals through the RAMM, totaling 3.3k redemptions, had the largest impact. The drop in ETH price created a small positive FX effect from stablecoin holdings, while Cover Fees and Investment holdings also produced positive results.
The various impacts on the capital pool are summarised in the waterfall chart below.
The cover fee income is net of distribution commissions and excludes covers paid for in NXM. In such a case, the cover fee gets burned and there is no change in the Capital Pool.
Monthly Change in NXM Book Value
The Capital Pool’s ETH/NXM value increased from 0.02303 to 0.02317, representing an annualised 6.94% rise this month. This growth was primarily driven by investment returns of 2.22% and value added from RAMM of 2.71%.
The various impacts on the capital pool are summarised in the waterfall chart below.
→ Members can track in/outflows on the Ratcheting AMM Dune Dashboard.
→ Members can track the cover income on the Covers Dune Dashboard.
End of Month Pool Split
The split of the Capital Pool at the end of January ‘25 in ETH terms is as follows.
The largest largest portion of cover buys in January were again denominated in USDC.
→ Members can find the updated split at any time on the Capital Pool and Ownership Dune Dashboard.
Aave USDC Loan
On January 20th, the Advisory Board repaid 709.1k USDC from the Aave loan - a substantially higher amount compared to previous months due to strong sales results in December. This reduced the outstanding debt balance from 4.89m to 4.19m USDC.
stETH Divestment
On January 28th, the Advisory Board completed the sale of 6,000 stETH for ETH as per the Divestment Framework, bringing the total in the Capital Pool to 10.9k ETH - lower than target 12.5k ETH, but due to market conditions, limit order execution took longer than expected and redemptions continued while waiting for execution to occur w/ low slippage settings in place.
State of the Investments
In the last month, the Mutual earned 139.8 ETH on its investments, overall, as broken down below.
stETH Monthly Return: 73.987
stETH Monthly APY: 3.082%
rETH Monthly Return: 35.001
rETH Monthly APY: 2.831%
Enzyme Vault Monthly Return: 32.024
Enzyme Vault Monthly APY: 2.724%
Enzyme Vault includes Kiln, EtherFi and Chorus One/Stakewise V3 investments
aEthWETH Return: 10.275
aEthWETH APY: 1.927%
debtUSDC Return: -11.624
debtUSDC APY: 10.083%
Aave Net Return: -1.349
Aave Net APY: -0.251%
Total ETH Earned: 139.663
Total Monthly APY: 2.292%
Based on average Capital Pool amount over the monthly period
All returns after fees
The active staking investments generated yields between 2.7% and 3.1% APY, showing healthy though reduced ETH staking returns. The Aave USDC debt position, using ETH as collateral, resulted in a net APY of -1.35%. Overall, the Capital Pool earned 2.29% APY, calculated from the average Capital Pool value during the month.
Investment Committee Priorities
- We are working with Enzyme and Chainlink to incorporate the unclaimed Kiln rewards into the NXMTY oracle; this update is still pending, as per the last update.