TwentyFour Select Monthly Income Ord
Rated Fund 2017-19. A high yield fuelled by an ‘illiquidity premium’
TwentyFour Select Monthly Income is at the higher end of the risk spectrum as it has the vast majority of its assets in sub-investment grade stock. It currently yields 7.2% and distributes income monthly.
A relatively new investment trust, launched in 2014, it is run by a six-strong team at TwentyFour Asset Management, which specialises in fixed income investing. The trust is diversified across asset-backed securities, high-yield bonds, bank capital, corporate loans, high-yield bonds and leveraged loans.
It is specifically designed to take advantage of the premium returns available from less-traded fixed income investments. Such securities do not offer enough liquidity for open-ended investment funds, but are well suited to a closed-ended vehicle. However, in order to provide investors in this trust with liquidity, the managers offer a quarterly share buyback facility.
In terms of ratings, more than two thirds of the £166 million trust was in bonds rated B or BB at the end of 2018. On a sector basis, 35% was in banks and 31% in asset-backed securities, with smaller allocations to European high-yield, insurance bonds, emerging markets and US high yield.
Its interest rate duration is actively managed, currently averaging 2.9 years, and foreign currency exposure is hedged to sterling.
Going into 2019, the managers maintain a focus on adding only short-duration credit at attractive spreads. A considerable portion of the portfolio redeems or is expected to be called in 2019, which “should provide more predictable performance”.
The trust is popular with investors and its shares traded at a premium to net assets of up to 5.8% during 2018.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
David joined TwentyFour in September 2018. Based in the New York office, he serves as the Head of US Credit as well as one of the portfolio managers of the Multi-Sector Bond team. He is a credit specialist with 30 years’ experience in fixed income markets gained across a variety of senior roles in asset management and investment banking in London, Frankfurt and New York. He has held leadership positions in high yield, credit derivatives, structured products and global credit trading at Credit Agricole, BNP Paribas, Greenwich Capital and UBS. Once a member of the infamous New York Cosmos soccer team, David went on to earn degrees in business at the University of British Columbia, Vancouver and law from the University of Reading in the UK.
Gary Kirk is a Portfolio Manager and one of the founding partners of TwentyFour AM since 2008. He is on the firm's Investment Committee, which sets the overall risk bias for the portfolios managed by the firm, and his main responsibility is managing the firm's Multi-Sector Bond team. Since 1988, Mr. Kirk has developed an expertise in fixed income markets across a variety of senior roles in asset management and investment banking, including leadership positions at Daiwa Capital, Royal Bank of Canada, CDC Group and Wachovia Bank. Mr. Kirk graduated in Biochemistry from the University of London.
Eoin Walsh is a Portfolio Manager and one of the founding partners of TwentyFour AM since 2008. He is on the firm's Investment Committee, which sets the overall risk bias for the portfolios managed by the firm, and his main responsibility is managing the firm's Multi-Sector Bond team. Since 1998, Mr. Walsh has developed an expertise in fixed income markets across a variety of roles including at Citigroup Alternative Investments. Mr. Walsh graduated in Accounting & Economics from the University of Limerick.
Felipe Villarroel is a Portfolio Manager in TwentyFour AM's Multi-Sector Bond team since 2011 and is a member of the Investment Committee. Prior to joining TwentyFour AM, Mr. Villaroel worked as an Asset Allocation and Strategy Analyst at Celfin Capital in Chile, now part of the BTG Pactual group. There, Mr. Villarroel took an active role in developing the team's strategic view of the global macro economy and asset classes. Mr. Villarroel graduated from Pontificia Universidad Catolica de Chile with a Bachelor's degree in Economics and Business Administration before obtaining a master's in Finance from the London Business School. Mr. Villarroel is also a CFA Charterholder.
Mark has 24 years of experience in fixed-income markets, gained in a combination of senior roles in investment banking and asset management. Mark is one of the 9 partners of TwentyFour and serves as the Firm’s Risk Manager with responsibility both for independent market risk oversight of the Firm’s investment portfolios and maintaining the Firm’s risk measurement, management and reporting framework. Before founding TwentyFour in 2008, Mark was one of the original partners at Synapse Investment Management which he founded along with Graeme Anderson in June 2006. Prior to that Mark was a Managing Director at Barclays Capital in London where he established and led various units of its European fixed income distribution business. Mark joined Barclays Capital in March 1999. Prior to that he was an executive director at Lehman Brothers where for 5 years he played a key role in helping Lehman establish their European Credit Business. Mark began his investment banking career in 1990 with Morgan Stanley in fixed income.
Pierre Beniguel is a Portfolio Manager in TwentyFour AM's Multi-Sector Bond team since 2014. He also manages foreign currency hedging and daily funding for a number of funds and managed accounts. He has over five years of experience, prior to TwentyFour AM, in fixed income and previously worked in WestLB's credit trading and special situations divisions. Mr. Beniguel graduated in Mathematics & Economics from University College London.
Data provided by Morningstar.
The Content is only for your general information and use and is not intended to address your particular requirements. The Content does not constitute any form of advice, recommendation or arrangement by Money Observer and is not intended to be relied upon by you in making (or refraining from making) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision.
This information is sourced from our partner Morningstar. We believe the data to be correct however you should take care in using any information.
You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.